The UK’s GDP grew by 0.5% in June and is now 0.8% above its pre-pandemic level from February 2020, new data from the Office for National Statistics (ONS) has indicated.

A range of businesses cited the additional bank holiday in May as a reason for increased output in June compared with May, when the monthly GDP shrunk by 0.1%.

Looking at the broader picture, the latest ONS figures have suggested that GDP has shown 0.2% growth in the three months to June.

The services sector showed 0.1% growth in the three months to June, while production grew by 0.7%, and construction grew by 0.3%.

Head of investment research at Wealth Club, Jonathan Moyes, commented: “It was pleasing to see the UK produce a more upbeat 0.5% for June, this was much stronger than consensus forecasts, which called for around 0.2% growth. On a quarterly basis, the economy remains in the slow lane, with GDP up 0.2%. This is the sixth quarter in a row where growth was 0.2% or less.

“The UK is by no means out of the woods. June’s hot weather flattered the growth figures, this get out of jail free card will only be played the once. A dismal July and August is likely to weigh on consumer spending for Q3. Add to this the UK’s dominant services sector showing signs of slowing, and it is a challenge to reconcile how the UK economy can escape a recession after such a steep rise in interest rates.

“However, forecasters have long predicted a recession that has yet to arrive. The economy may continue to find a way to muddle through. News of wage growth surpassing inflation for the second half of the year May provide the confidence the economy needs to avoid falling into recession.”

Analysis by the Resolution Foundation has also indicated that the UK economy has grown by just 0.7% since the start of 2022, the weakest 18 months of growth since the 1950s, and lower than other G7 countries except Germany, which went into recession earlier this year. During that period, the UK has also had the highest average inflation among the G7, at 9.1%.

Research director at the Resolution Foundation, James Smith, added: “The good news is that the economy grew by 0.2% in Q2, stronger than the flat growth many had expected. This is a continuation of the UK’s relative resilience as we continue to dodge the technical recession experienced elsewhere in the face of the ongoing cost of living crisis.

“But the big picture is that the UK economy has expanded by just 0.7% since the start of 2022 – the weakest growth in 65 years outside of a full-blown recession.

“With the economy continuing to stall, we are far from out of the cost of living crisis woods yet. Such weak growth will feel like a recession to many as families struggle with the ever-rising cost of essentials and higher mortgage repayments.”

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