Something for everyone in latest economic data

Growth figures for the second quarter of the year have something for everyone.

A better-than-expected outturn of 0.3% over three months, helped by a healthy 0.4% bounce in June, put a little spring in the chancellor's step on the long road to the autumn budget.

For her critics, meanwhile, any slowdown from the 0.7% recorded in the first three months of the year would be cast as failure, even if the figure was much improved on the 0.1% consensus forecast among economists.

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Arguments over nuances in the numbers often say more about the politics of the day and the failings of economic forecasters than the reality for households and businesses.

For Rachel Reeves, facing darkening forecasts for inflation, unemployment and the size of the hole in the public finances, there is qualified good news here.

The economy is undoubtedly growing, albeit more slowly in the past three months than in the first quarter, and taken together, growth of 1% is the strongest in the G7 in the first half of this year.

More awkwardly for a government that made growth its priority on taking office, the slowdown in the second quarter coincides with the hike in employment taxes in April that was the centrepiece of the last budget.

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The underlying figures also show that public spending was the largest driver of growth, but it is the private sector that needs to thrive to meaningfully change the equation when Ms Reeves comes to balance the books and meet her own fiscal rules.

More important to most is the reality of an economy in which food and fuel inflation has become entrenched and forecast to rise further before the year is out.

Interest rates have been cut further to 4%, the lowest level since March 2023, but with unemployment ticking up as the labour market tightens, the timing of further cuts remains unclear.

And while wages continue to rise above inflation, increasing real-terms income, for many, it simply does not feel like it.