The British economy is growing more slowly than expected

Economy of sight Britain In the second quarter, at a slower pace than the original estimates, despite signs of improvement in housing finance, before the annual budget announcement next month.

Office for National Statistics data showed that the economy grew by 0.5% in the period between April and June.

Preliminary estimates by the Office for National Statistics – for the second quarter – showed GDP growth of 0.6%, which is the same level expected by economists.

A better view

Joura Suri, an economist at PricewaterhouseCoopers, said: “Gross domestic product grew in the second quarter of this year at a pace slightly lower than initial estimates, but Britain’s economic outlook has improved significantly since the beginning of the year.

“This is largely due to the return,” he said Inflation to the target level, and start reducing prices Interest And political stability after the elections.”

The saving rate for British households rose to 10% in the second quarter of the year, up from 8.9% in the first three months, while the rate of savings per capita increased. gross domestic product For the second quarter in a row, although it is at a slower pace than the first quarter.

These statements represent a blow to the Prime Minister Keir Starmer Who’s the bet on it? Economic growth To improve public services, that is what he promised the voters.

Starmer promised to increase the growth rate of the economy to 2.5%, which is higher growth rates since the global financial crisis in 2008, and higher than analysts’ expectations for growth in the coming years.

Last week, Starmer said his government had “achieved far more in 11 weeks than the previous government had achieved in the last 11 years”. “

He pointed to ambitious goals set for building houses, establishing a government agency to invest in environmentally friendly energy, and hiring police officers and teachers.

The Prime Minister explained, despite laying the foundations for a reduction in funding and an increase Taxes In the budget that must be approved by the end of October next October, the government will not follow an “austerity path.”

He repeated his warning that he would start “hard” but ensure that “our public services work properly”, promising to exempt workers from tax increases.

Starmer is betting on economic growth to improve public services, which he promised voters (Reuters)

Other signs

There are other signs that the British economy has lost much momentum since their arrival Pt To power last July, partly due to his warnings about the state of public finances.

In July last year, the output of the British economy stood still for the third time in 4 months, with confidence declining due to fears that the new Finance Secretary, Rachel Reeves, will announce the new draft budget on 30 October. Taxes A reduction in public expenditure with the aim of controlling the budget deficit.

The Bank of England (Central) expected growth to slow to 0.3% in the third quarter of this year, but pointed out that there are signs that the first cut in interest rates in August, and further cuts are expected. on a decline in interest rates. inflation, are things that could stimulate growth later in the year.