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UK GDP grew by an unexpectedly strong 0.5% in June to take overall growth for the second quarter to 0.2%.

Following a 0.1% drop in GDP in May, the UK economy rebounded in June to grow by 0.5%.

A range of businesses cited the additional bank holiday in May as a reason for increased output in June 2023 compared with May 2023.

The strong June growth means GDP has shown 0.2% growth in the three months to June 2023, following 0.1% growth in the first quarter.

The Office of National Statistics said production output grew by 1.8% in June 2023 after a fall of 0.6% in May 2023, with this sector being the main contributor to the growth in monthly GDP in June.

The construction sector grew by 1.6% in June 2023, following a fall of 0.3% in May 2023.

Services output was up 0.2% in June 2023, after showing no growth in May 2023, while output in consumer-facing services grew by 0.5% in June 2023, following a fall of 0.2% in May 2023.

Darren Morgan, the ONS’s director of economic statistics, said: “The economy bounced back from the effects of May’s extra bank holiday to record strong growth in June.

“Manufacturing saw a particularly strong month with both cars and the often-erratic pharmaceutical industry seeing particularly buoyant growth.

“Services also had a strong month, with publishing, car sales and legal services all doing well, though this was partially offset by falls in health, which was hit by further strike action.”

Morning update

On the markets this morning, the FTSE 100 has dropped 0.7% to 7,566.6pts.

Early risers include Virgin Wines, up 1.4% to 37.5p, Nichols, up 1.1% to 1,011.4p and Hotel Chocolat, up 0.9% to 111p.

Fallers include McBride, down 2.6% to 39.2p, Kerry Group, down 2.6% to €87.34 and Just Eat Takeaway.com, down 2.6% to 1,236p.

Yesterday in the City

The FTSE 100 rose 0.4% to 7,618.6pts yesterday.

Deliveroo was a major riser after hiking its earnings forecast, despite a first-half drop in transaction numbers, with the delivery player closing the day up 3.5% to 127.8p.

Other risers included Haleon, up 2.3% to 336.2p, Diageo, up 2% to 3,406.5p, Just Eat Takeaway.com, up 1.7% to 1,269p, Virgin Wines, up 1.4% to 37p, Tesco, up 1.3% to 254.8p and PZ Cussons, up 1.2% to 166p.

The day’s fallers included Domino’s Pizza Group, down 3.5% to 409.6p, PayPoint, down 3.1% to 558p, Kerry Group, down 2.6% to €89.68, Naked Wines, down 2.3% to 67.5p, Greencore, down 2.1% to 90.4p, Bakkavor, down 1.9% to 103.5p, and Premier Foods, down 1.5% to 122.2p.

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