The UK economy expanded at a slower pace in the second quarter of 2024 than previously estimated, according to revised figures. Despite a surge in business investment, overall growth was dampened by downward revisions in government spending and exports.

Business Investment Soars

Business investment saw a significant increase in Q2, providing a strong boost to the economy. Revisions to gross fixed capital formation and business investment figures reflected updated survey data and seasonal adjustments, showing that companies were ramping up spending on equipment, infrastructure, and technology. This surge in investment was seen as a positive sign of long-term confidence among UK businesses.

Government Spending and Exports Revised Downward

In contrast, government spending was revised downward, contributing less to GDP growth than initially thought. Similarly, exports were weaker than expected, weighing on overall economic performance. Sluggish global demand and trade uncertainties likely played a role in the underperformance of the export sector.

Household Spending Holds Steady

Household spending, which has been a key driver of the UK economy in recent years, remained steady during the quarter. While inflationary pressures have moderated somewhat, consumers continue to face rising living costs, which could limit future spending growth.

Economic Outlook

The revised Q2 figures highlight the mixed picture facing the UK economy. While business investment is rising, weaker government spending and exports pose challenges to sustaining stronger growth. The economy’s future trajectory will likely depend on external factors such as global trade conditions and domestic policy decisions, including fiscal measures in the upcoming autumn budget.