UK economic growth between April and June was less than previously estimated, according to official figures.

Gross domestic product (GDP) – which measures all the economic activity of companies, governments and people in a country – rose by 0.5%, down from an initial reading of 0.6%.

The manufacturing and construction sectors fell by more than first thought.

The data has emerged as the Labour government, which has made economic growth one of its key policies, prepares to announce its first Budget in four weeks’ time.

The Office for National Statistics (ONS), which published the figures, said the production of transport and related equipment tumbled by 3.1% between April and June after a long period of growth.

It was first estimated to have fallen by 0.7%.

The ONS said there was evidence to suggest that factories had reduced manufacturing as they prepared for the shift to making electric cars.

Construction also dropped due to a continuing decline in building new homes. However, the ONS said there were some signs this was beginning to ease.

Paul Dales, chief UK economist at Capital Economics, said the downward revision “shouldn’t make the Bank of England worry too much about the economy running out of momentum”.

However, he added: “It may add to the Bank’s view that interest rates need to be reduced further.”

The Bank of England cut interest rates for the first time in nearly four years in August, to 5% from 5.25%.

Financial planning firm Calton has appointed Bruce Hendry as executive director to lead its head office in Edinburgh

He will take up the role from today (30 September).

The appointment is the capstone of a year of growth and consolidation and is key to Calton’s strategy for UK growth.

Hendry is a chartered fellow of both the Personal Finance Society and the Chartered Institute for Securities and Investment.

He holds an Executive MBA from Edinburgh University Business School and has previously lectured at Dundee and Edinburgh Universities.

He has held previous roles at Thomson Cooper Accountants, Charles Stanley and Co and Barclays Wealth and Investment Management.

He will join Tom Ham, Laura Bruce, Gary Dale and Mark Polson on the company’s board of directors.

Commenting on his appointment, Hendry said: “I have been watching Calton’s development closely. The firm’s vision aligns with mine – to build client confidence through delivering exceptional outcomes and service.

“Much of that is about values, but Calton is also breaking new ground in developing systems that will help make that vision a reality. I look forward to showcasing this to the profession.”

Calton Wealth uses AI to cut out ‘menial tasks’ for advisers

Calton founder and group chief executive Tom Ham said: “Bruce choosing Calton is a vote of confidence in our mission and ambition.

“He has already built a distinguished senior career in advising and investment management across the UK and has a proven track record of building and growing departments.

“His expertise and dynamism is second to none. He will be an essential force in taking Calton and our talented team to new heights in the service we offer our clients.”

Over the past 12 months, Calton has moved to a new flagship office in Rutland Square in the heart of Edinburgh’s financial district.

Calton Wealth makes first acquisition in ‘key step’ for growth plans

It has increased its client-facing and support staff and launched a new digital presence. A groundbreaking new management system will launch later this autumn.

Ham added: “We are focused firmly on a future in which technological solutions will ease friction in our day-to-day processes while ensuring that we adhere to the highest professional standards.

“Our bespoke management system will be an essential tool across our team, from advisers to paraplanners, to marketing, monitoring and reporting.”

Calton is a financial planning and investment management firm founded in Edinburgh by Tom Ham in 2021.

With offices in London and the Scottish Borders, it has clients across the UK.

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UK house prices rose at their fastest annual pace for two years in September, in a sign of the impact of falling mortgage rates on the property market.

The average property price rose by an annual rate of 3.2 per cent, up from 2.4 per cent in August and the fastest rate since November 2022, according to new figures from mortgage lender Nationwide.

Economists polled by Reuters had expected a rise of 2.7 per cent.

On a monthly basis, the rise was 0.7 per cent, bringing the UK’s average house price to £266,094, about 2 per cent below the all-time highs recorded in the summer of 2022.

Robert Gardner, chief economist at Nationwide, said increases in incomes had continued to outstrip the rise in house prices in recent months, while borrowing costs had edged lower amid expectations that the Bank of England would continue to lower interest rates.

“These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards,” he said.

THE UK economy grew less than first thought, revised GDP figures show.

Gross Domestic Product went up by 0.5%, not 0.6%, in the second quarter of this year, the Office for National Statistics (ONS) has said.

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Growth was mainly driven by a rise in the services sector, but the manufacturing and construction industries industry dragged down the headline figure, according to the ONS.

It comes following GDP growth of 0.7% from January to March, which was revised up from 0.6% previously.

GDP measures the value of goods and services produced in the UK.

It also estimates the size and growth of the economy.

The fresh figures published this morning show that the UK economy continued its recovery from recession at the end of last year, just at a slightly slower pace than previously thought.

Compared with the same quarter a year ago, real GDP is estimated to have increased by 0.7% between April to June this year.

The latest figures still mean that GDP has grown for two consecutive quarters and will come as a boost to the Government despite inflation sticking to 2.2% in August.

Liz McKeown, director of economic statistics, ONS said: “Today’s updated GDP figures for 2023 and 2024 include new annual survey data, VAT returns and updated information about the relative size of each industry for the first time.

“However, after taking on these improvements, the quarterly growth path across the last 18 months is virtually unchanged.”

Ms McKeown also added that according to the latest data show that household savings continue to increase and are now at their highest rate since the Covid-19 lockdowns.

Economists had previously predicted the UK economy would continue to grow across the second quarter of this year, with higher growth expected in the second part of 2024 and into 2025.

It came following inflation slowing to 2.2% from a record high of 11.1% in October 2022.

The UK economy shrank by 0.3% in the last three months of 2023 meaning it tipped into a technical recession, defined as two or more quarters in a row of falling Gross Domestic Product (GDP).

But, the recession was considered “mild” compared to others in recent history.

However, experts say that today’s revised figures show the pace of economic recovery may have been “slightly overstated”.

Professor Sarwar Khawaja FRSA, chairman, executive board, Oxford Business College, said: “The downward revision of quarterly growth from 0.6% to 0.5% sounds like a minor book-keeping change, but it is more significant than it might appear at first glance.

“It suggests that the initial optimism about the pace of economic recovery may have been slightly overstated.

“The revision primarily stems from a less robust performance in the services sector than initially thought, with growth adjusted from 0.8% to 0.6%.”

He added that due to services accounting for around 80% of the UK economy, this morning’s adjustment has “considerable implications”.

“While the sector is still growing, it is facing more headwinds than previously estimated,” he said.

What it means for your money

GDP is a measure of the economic output of companies, individuals and governments and how healthy an economy is.

A healthy economy is one where GDP is growing but if it stalls or is falling, it’s bad news for businesses and consumers.

Most economists, politicians and businesses want to see GDP rising steadily.

This is because it usually means people are spending more, more tax is paid to the government and workers get better pay rises.

A healthy economy usually means lower inflation, rising employment, less poverty, and more money in your pocket.

Lower inflation is good because it means prices don’t rise as fast, putting less financial pressure on households.

The consumer Prices Index (CPI) inflation stood at 2.2% in August, stalling from July following a slight rise from 2% the previous month.

However, this is still significantly lower than October 2022, when it peaked at 11.1% following soaring wholesale energy prices.

It’s important to note when inflation falls that doesn’t mean prices have stopped rising, they are just increasing at a slower pace.

The BoE will be watching the latest GDP figures closely as it decides whether to lower its base rate further in the second half of the year.

The central bank cut the base rate from 5.25% to 5% earlier this month, with expectations it could be dropped further this year.

High street banks and lenders use the BoE base rate to set their own interest rates on mortgages, loans and savings accounts.

If it comes down, interest rates on mortgages, loans and savings accounts tend to fall too.

Mortgage lenders also tend to bring down rates in anticipation of the base rate falling.

UK house prices in September rose by 3.2% compared with a year ago – the fastest rate for nearly two years, according to the Nationwide.

The building society said that annual growth was highest since November 2022, with terraced homes driving the increase.

It said rising incomes and the expectation of falls in interest rates were improving affordability for buyers.

The average UK house price in September was £266,094, it said.

The latest survey comes as competition has intensified between lenders in recent months.

Brokers say that providers have been offering the best deals to new, house-purchasing customers, rather than those who are remortgaging.

Nationwide, which is the UK’s largest building society, recently announced new borrowers could request a mortgage up to six times of their total income with a 5% deposit, but it would only be available for those taking out a five or 10-year fixed-rate deal.

Other lenders have also been lowering the rates of interest they charge.

However, the cost of a mortgage deposit, as well as the monthly repayments, remain major hurdles for potential first-time buyers trying to buy a home.

House prices have been relatively stagnant in the last year, as activity in the UK housing market has been limited.

But many commentators suggest, with interest rates expected to fall, demand from buyers could now pick up.