The UK economy grew in the second quarter of this year, new figures show. According to the Office for National Statistics, gross domestic product (GDP) grew by 0.3% between April and June after 0.7% growth in the first three months of the year.
Chancellor Rachel Reeves has vowed to boost the economy’s productivity in the upcoming Autumn Budget on November 26. Government borrowing hit a five-year high of £18 billion last month, mounting pressure on public finances. There are now concerns over new wealth taxes which would target high-value homeowners.
Economists at PwC previously said UK economic growth is “subdued but not stalling”. They said that UK GDP is on track to grow by 1.3% in 2025, which is driven by a stronger than expected first six months.
According to the financial experts, the growth was stunted by excessive government spending while household consumption moderated. Investment also fell as firms were impacted by rising costs and economic uncertainty.
Reeves recently said she is facing “harsh global headwinds” but insisted she would keep control of the public finances. She claimed that international events had caused “long-term damage” to the UK economy.
Enrique Diaz-Alvarez, chief economist at global financial services firm Ebury, said: “The PMIs of business activity suggested a loss of momentum in the UK economy. Both the services and manufacturing indices fell well short of expectations, and while we are seeing modest growth in the former, the contraction in the latter is accelerating.
“Gilt yields continue to hover near multi-decade highs, as markets remain wary of the willingness and ability of the Labour government to close the fiscal gap.”
Meanwhile, finance expert Nigel Green, chief executive of the deVere Group, warned Brits to expect “inevitable” tax rises during the Chancellor’s next budget. He said Reeves has not ruled extending the freeze on income tax thresholds, a “stealth measure”, on Brits as the Treasury looks to grab revenue “wherever it can find it”.
The expert warned: “This is the moment to review wealth structures, pension contributions, and international planning. Waiting until the Budget speech is too late. By then the measures will already be locked in, and the cost of inaction will be permanent.”
