GDP figures: ‘Businesses directly serving consumers are still feeling the pinch’
Mr Sarwar Khawaja FRSA, chairman, executive board, Oxford Business College, said: “The UK economy has shown some resilience in the face of ongoing challenges, with two quarters of growth suggesting a modest step forwards.
“The services sector, which has long been the backbone of the UK economy, has been the main driver of this growth. This robust performance is encouraging, as it suggests the sector is adapting to the post-pandemic landscape and finding ways to thrive despite ongoing economic pressures.
“The picture is not uniformly positive across all sectors. Both production and construction output contracted slightly, showing the uneven nature of the UK’s economic recovery.
“One concern is the performance of consumer-facing services, which saw a slight decline of 0.1% in Q2 compared to Q1. Despite the overall growth in services, businesses directly serving consumers are still feeling the pinch due to the ongoing cost-of-living crisis and its impact on household spending.
“For businesses, these figures present a mixed bag. Those in the services sector that are less dependent on direct consumer spending may find opportunities for growth and expansion. However, companies in production, construction, and consumer-facing services may need to brace themselves for continued challenges and focus on efficiency and innovation to maintain their competitive edge.
“Business and political leaders will be asking whether this growth can be sustained and broadened across all sectors. The resilience shown by the services sector is encouraging, but for a truly robust recovery, we need to see stronger performance in production and construction as well.
“It’s positive that the UK economy is showing signs of recovery, but the path ahead remains challenging. The coming quarters will be crucial in determining whether this growth can be sustained and broadened to create a more balanced and resilient economic recovery.”
