UK business investment increased 0.8% year-on-year in the second quarter of 2024, reversing a revised 1.3% decline in the first quarter and ending two consecutive quarters of contraction. On a quarterly basis, investment rose 0.5% in Q2 after a 0.9% fall in Q1, according to official data released today. The preliminary figures suggest businesses may be regaining confidence despite a difficult economic backdrop, with the Bank of England's gradual approach to interest rate cuts and easing inflation pressures likely helping investment decisions. Even so, investment remains below pre-pandemic peaks. The UK recovery has been uneven since the sharp pandemic-era drop in 2020, with supply chain disruption and Brexit-related uncertainty weighing on capital spending. Economists say sustained business investment is important for productivity, while policymakers have also highlighted the UK's weak investment share of GDP (gross domestic product) relative to other G7 nations. The latest uptick could support jobs, innovation and demand across supply chains, but high borrowing costs and geopolitical risks still threaten whether the improvement can be sustained.