After UK economic growth in the first quarter of 2024 was revised higher, economists and analysts said it was good news for whoever is Prime Minister after next week's election but could make the Bank of England wait longer before cutting interest rates.
Gross domestic product was revised up to 0.7% quarter-on-quarter, the Office for National Statistics revealed, from its previous estimate of 0.6%.
Included in the total, a 0.4% rise in consumer spending was supported by continued strong growth in real household disposable income, which increased 0.7% for the second consecutive quarter.
The ONS also revealed that the household saving ratio rose to 11.1% from an already-high 10.2% at the end of 2023.
Paul Dales, chief UK economist at Capital Economics, said the data indicated real household disposable income will grow by more than 2% this year, underpinning his forecast that consumer spending will be the main driver of GDP growth of around 1.0% this year and about 1.5% next year.
"Should the saving rate fall back from its unusually high level, the economic recovery could be even stronger," Dales said.
"This is certainly good news for whoever will be the Prime Minister this time next week, although it could also contribute to the Bank of England cutting interest rates a bit slower than otherwise."
Danni Hewson, AJ Bell's head of financial analysis, said the fact that the country plodded out of recession at the start of 2024 with a little more pace than previously expected could influence votes in next Thursday's election.
"It matters, especially as the nation weighs up what it wants from the next government. Growth has been front and centre of party manifestos, even if they differ on the details of how that growth can be achieved," she said.
Rob Wood, chief UK economist at Pantheon Macroeconomics, pointed out that growth int he first quarter now exceeds the 0.6% assumption in the May forecasts from the Bank of England's monetary policy committee.
"The MPC said in the minutes of their June policy meeting that they would cut interest rates even with strong growth in H1 2024 because they expect the economy to slow to a more manageable 0.2% quarter-to-quarter pace in the second half of the year.
"Even so, growth even further above potential in H1 2024 may give the MPC some pause for thought," he said.
Based on this, Wood said he was now even more confident that the BoE rate-setters will wait until September before cutting the base rate from current levels.
Peter Arnold, UK chief economist at EY, said the EY ITEM Club expects GDP to grow at a "decent pace" in the second quarter but "probably a bit softer" than the first.
Further ahead, he says: "Provided rising consumer confidence results in households gradually moving away from the cautious sentiment exhibited over the last year, the EY ITEM Club thinks there is a prospect of a decent consumer-led recovery."