Monday, May 20, 2024
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What does GDP growth mean for me?

By Rishi Sunak MP

Today, the economy has grown by 0.6 percent. But what does that news mean for you?

UK gross domestic product (GDP) is the measure of the size of a country’s economy and is used to indicate the health of that economy.

If it is growing fast that means resources available to people in the country – goods and services, wages and profits – are increasing.

These growth figures show that the economy is turning a corner.

In October 2022, the Bank of England were expecting the longest recession in 100 years, and the Office for Budget Responsibility said the economy was going to shrink by 1.4 percent.

But that didn’t happen. The economy grew last year, is growing this year, and is forecast to grow faster than France, Germany, Italy, Japan over the next six years.

We have made good progress since October 2022. For example, inflation has fallen to its lowest rate for two and a half years.

What is inflation?   

Inflation measures the change in prices of goods and services in the economy. A drop in inflation means that prices are now rising more slowly.    

Combined with wages now growing faster then prices, this makes the cost of living more affordable, because you can buy more with the money in your pocket.

Mortgage rates are down from their peak and wages have grown in real terms for nine months in a row. That shows that the plan for our economy is working.

Because of the progress we have made, we’ve been able to bring taxes down so that you can keep more of your money.

We’ve already cut the National Insurance tax for employees by a third – meaning those earning the average salary will receive an extra £900 per year in their pay packet.

We think it’s unfair that workers pay two taxes on their income – income tax and National Insurance – when those who earn their income from other sources only pay income tax.

That’s why we want to keep cutting National Insurance until it’s gone.

That’s our plan: lower taxes, lower inflation, together with higher growth and higher wages, so that you can build a better future for yourself and your families.

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