UK household income has shown stronger growth than previously estimated during the first half of the year, according to revised official data. The increase in income per head to 1.1% between January and June reflects a rise in economic growth, highlighting the resilience of the UK economy since the onset of hostilities in the Middle East over seven months ago.
Economic Growth Revision
The Office for National Statistics (ONS) reported that gross domestic product (GDP) increased by 0.5% in the April to June quarter, up from the previously estimated 0.4%. This growth rate matches that of the US during the same period, with the economy having grown 0.6% in the first quarter.
Analysts suggest that a “Burnham bounce” in confidence may have contributed to this growth, following the announcement of the Makerfield by-election in May, which set the stage for the former mayor of Manchester to potentially become prime minister.
Household Savings and Business Investment
The ONS also noted that households were able to save more, with the savings rate increasing from 8.6% in the first quarter to 8.8% by the end of June. Thomas Watts, a fund manager at Julius Baer, remarked that these figures represent “yet more positive news for the new administration,” especially after previous data indicated the UK economy's resilience since the beginning of the US-Israel war on Iran in February.
