UK economic growth slows down as Iran war pushes up energy prices
Summary
The UK economy grew more slowly in the second quarter of the year, with GDP rising 0.4%, down from 0.6% in the first quarter. Higher energy prices, affected by the conflict in Iran, are starting to slow economic growth and may increase inflation and pressure on interest rates.Key Facts
- UK GDP grew by 0.4% from April to June 2024, slower than the previous quarter’s 0.6%.
- The Middle East conflict, including the Iran war, has pushed up energy prices.
- High energy costs are beginning to weigh on the UK’s economic growth.
- New Chancellor John Healey will present his first budget on 28 October 2024.
- There may be pressure on the government to help households with rising energy bills this winter.
- Andy Burnham has announced a VAT cut on electricity bills but suggests more support is needed.
- Inflation data due next week is expected to show an increase, reflecting higher utility bills.
- Continued inflation may push the Bank of England to raise interest rates again.
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