As a result, the UK LEI contracted by 0.5 per cent over the first half (H1) this year, a smaller rate of decline than the 3.1-per cent contraction over H2 2023. 

“As in May, the weakness [in June] was driven by labour market components (unemployment claims and working hours) and financial components. However, consumers’ assessment of economic conditions and housing sales expectations that had been weighing on the index in the past few months improved in June and contributed positively,” said Allen Li, associate economist at the US think tank, in a release.

“The LEI’s six-month growth rate, though still negative, has been considerably less so since the beginning of this year. This suggests that headwinds to economic activity have lessened, and that the UK economy should continue to expand after the strong recovery in the first half of 2024,” he added.

The think tank’s coincident economic index (CEI) for the country rose by 0.1 per cent in June to 104.8, following an increase of 0.4 per cent in May. Over H1 2024, the UK CEI grew by 0.5 per cent, after being flat over H2 2023.

The LEI provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term, while the CEI offers an indication of the current state of the economy.

Fibre2Fashion News Desk (DS)