The UK economy surprised economists by growing by 0.2% in the second quarter of the year and showed a much better than expected performance in June.

Official Data from the Office for National Statistics showed that GDP climbed by 0.5% in June, helped by the manufacturing sector.

Economists had expected GDP to grow by 0.2% in June and 0.0% in the quarter as a whole. The figures are a slight improvement on the first quarter of 2023, when the economy grew by 0.1%.

ONS director of economic statistics Darren Morgan 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 and car sales and legal services all doing well, though this was partially offset by falls in health, which was hit by further strike action. Construction also grew strongly, as did pubs and restaurants, with both aided by the hot weather.”

Quarterly, GDP is still 0.2% below where it was in the final three months of 2019, just before the Covid-19 pandemic hit.

Matt Britzman, equity analyst at Hargreaves Lansdown said: “These numbers push the chance of a recession further down the line, but the UK economy looks firmly stuck in a low growth cycle, and with further interest rate hikes firmly priced in by the markets – there doesn't look to be an immediate path out.”

Jonathan Moyes, head of investment research at Wealth Club, said: “The UK is by no means out of the woods. June’s hot weather flattered the growth figures, this get out of jail free card will only be played the once. A dismal July and August is likely to weigh on consumer spending for Q3.

"Add to this the UK’s dominant services sector showing signs of slowing, and it is a challenge to reconcile how the UK economy can escape a recession after such a steep rise in interest rates.”

Forecasts from the Bank of England see growth remaining sluggish for years to come.

Chancellor of the Exchequer Jeremy Hunt said: “The actions we’re taking to fight inflation are starting to take effect, which means we’re laying the strong foundations needed to grow the economy.

“The Bank of England are now forecasting that we will avoid recession, and if we stick to our plan to help people into work and boost business investment, the IMF (International Monetary Fund) have said over the longer-term we will grow faster than Germany, France and Italy.”