Kevin Brown, savings expert at Scottish Friendly, comments on the latest ONS GDP figures

“There is plenty to welcome in the news that the UK economy's growth has accelerated. It should not, however, be mistaken for a clean bill of health.

“Inflation remains stubbornly high, with the Bank of England now warning that it could reach 5 per cent in 2027. (1)

“Meanwhile, higher energy bills continue to eat into disposable incomes, a pressure likely to intensify as we head into winter. (2)

“So, while growth of 0.7 per cent is welcome, a stronger economy does not necessarily translate into improved living standards.

“The BoE’s decision last week to raise interest rates to 4 per cent may further illustrate the difficult road ahead. (3) Although, that said, stronger growth does offer reassurance that the economy may be better placed now to withstand tighter monetary policy.

“And while a higher base rate may improve savings rates, (4) the challenge remains ensuring that money which households can afford to put aside retains its value over time.

“Inflation can quickly erode gains on cash savings (5). And although maintaining an accessible financial buffer remains sensible, those with longer-term goals may wish to consider whether investing could offer greater growth potential, provided they are comfortable with the risks involved.”

 (1) https://www.ft.com/content/3d46dfb4-eef8-4ea0-9264-282bd269647e?syn-25a6b1a6=1

 (2) https://www.ft.com/content/3d46dfb4-eef8-4ea0-9264-282bd269647e?syn-25a6b1a6=1

 (3) https://www.bbc.co.uk/news/live/cjkge7ykl9vkt

 (4) https://www.which.co.uk/news/article/which-savings-accounts-beat-inflation-aTOqm9A3MDTH

 (5) https://www.moneyhelper.org.uk/en/savings/how-to-save/inflation-what-the-saver-needs-to-know