New GDP data shows unexpected growth

Date : 14 July 2022

Provisional data from ONS shows that economic output in the UK rose by 0.5% between April and May 2022.

This was surprising, given poor performance earlier in the year and the weakening financial position of many households.

Production and construction did quite well, but services showed the fastest growth. Within services, much of the growth impetus came from health and social care, especially within the NHS.

On the consumer side, there is evidence that shoppers are cutting back.

Demand for retail, recreation, gambling and eating out weakened month-on-month, which is likely due to weakening confidence and falling spending power.

Leading indicators (eg: business confidence) suggest that, despite unexpectedly positive data in May, risk of recession remains high - the economy cannot do well unless shoppers are feeling affluent and assured.

Even if recession is avoided, economic resilience to further “shock” events (eg: the return of COVID-19) will be very low and the ability to maintain government spending plans will be threatened.

In our upcoming Viewpoint webinar at 11 a.m. on Thursday 21 July, we will consider the state of the UK economy, the position of shoppers and what it might mean for food and consumer goods businesses.

Register your place here.

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