The UK economy showed robust growth in the second quarter of 2024, expanding by 0.6% compared to the forecasted 0.6%. This positive performance follows a 0.7% growth in the previous quarter, surpassing market expectations.
On a year-on-year basis, the UK GDP rose by 0.9% in Q2, beating the expected 0.9% and the previous quarter’s 0.3%. Additionally, the month-on-month GDP for June remained steady at 0%, in line with estimates.
Industrial Production and Manufacturing Production in the UK also demonstrated growth, with both indicators increasing by 0.8% and 1.1% respectively in June, outpacing expectations.
However, Total Business Investment saw a slight decline of 0.1% in the second quarter of 2024.
Finance Minister Rachel Reeves acknowledged the challenges ahead for the new government, stating, “the new government is under no illusion as to scale of the challenge we have inherited.”
Market Impact and GBP/USD Movement
Despite the positive GDP and industrial figures, the Pound Sterling market remained relatively stable. At the time of writing, GBP/USD was trading 0.17% higher at 1.2845.
Analysis and Implications for Investors
The stronger-than-expected GDP growth in the UK signals a resilient economy and may attract investors looking for stable markets. The steady performance of the GBP/USD pair above 1.2800 reflects confidence in the UK economy.
Investors should closely monitor future economic data releases and government policies to assess the long-term stability and growth potential of the UK market.