THE UK economy grew again in the three months to July, official figures show.
Gross Domestic Product (GDP) rose by 0.5% in between May and July this year, the Office for National Statistics said.
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It comes following growth of 0.6% between April and June.
The figures show no growth in the month, but GDP rose by 0.5% in the three months to July.
Services output grew by 0.1% in July after falling by 0.1% the prior month.
Elsewhere, construction output decreased by 0.4% in July following a growth of 0.5% in June.
However, in the three months to July, it grew by 1.2%, marking its first positive three-month growth since September 2023.
Previously, GDP showed no growth in April, grew by 0.4% in May then did not grow again in June, due to strike action.
GDP is a measure of the economic output of companies, individuals and governments and of how healthy an economy is.
A healthy economy is one where GDP is growing but if it stalls or is falling, it’s bad news for businesses and consumers.
Today’s figures come just a week before the Bank of England’s Monetary Policy Committee (MPC) will decide on whether to raise, cut or hold interest rates.
Last month, the central bank reduced the base rate from 5.25% to 5%, marking the first cut since 2020.
The base rate sets the rate of borrowing charged to smaller high-street banks and lenders, which is passed on to consumers.
GDP growth or decline can sometimes have an impact on how this decision is played out, with the health of the economy as one of the key factors in setting the rate.
Plus, yesterday we revealed unemployment has fallen again in the three months to July as wage growth continued to slow.
What it means for your money
GDP is a measure of the economic output of companies, individuals and governments.
It’s also a measure of how healthy and prosperous an economy is.
If GDP is going up, it generally means people pay more in taxes because they’re earning and spending more.
This means more money for the government which can spend the extra cash on public services such as schools and hospitals.
When the economy shrinks, this can go in reverse, meaning households can see their standard of living drop.
If GDP falls, it means businesses struggle and may lay off staff from work as well.
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What this means for your personal finances
GROSS domestic product (GDP) is one of the main indicators used to measure the performance of a country’s economy.
When GDP goes up, the economy is generally thought to be doing well although today’s figures aren’t as strong as hoped.
Negative growth often brings with it falling incomes, job cuts and lower consumption.
The Bank of England (BoE) uses GDP as one of the key indicators when it sets the base interest rate.
This decides how much it will charge banks to lend them money, and is a way to try to control inflation and the economy.
So, for example, if prices are rising too fast, the BoE could increase that rate to try to slow the economy down. But it might hold off if GDP growth is slow.
The BoE cut interest rates twice in March due to coronavirus.
Base rate cuts means mortgage borrowers now typically benefit from lower rates, but at the other end of the scale savers earn less on their savings.
To measure GDP, the Office for National Statistics (ONS) collects data from thousands of UK companies.
Andrew Wishart, UK economist at Capital Economics, told The Sun the full impact of the crisis on jobs and businesses will only become apparent once the government starts to withdraw its support.
The research firm expects unemployment to double from 4 per cent to 8 per cent, with the same number of companies likely to go bust.
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