UK economy exits recession ahead of election

Britain exited a shallow recession with better-than-expected growth in the first quarter, official data showed yesterday, in a boost to embattled Prime Minister Rishi Sunak ahead of this year’s election.

Gross domestic product expanded 0.6% in the first three months of this year, the Office for National Statistics said, noting strong growth in service industries and car manufacturing.

That beat market expectations of 0.4% and marked the strongest performance since the fourth quarter of 2021, helping send London’s stock market to yet another record peak.

Sunak − whose governing Conservatives are trailing the main opposition Labour Party before a general election and suffered heavy losses in English local polls last week − has made economic growth one of his top priorities.

The economy had suffered two successive quarters of slight contraction in the second half of last year, meeting the technical definition of a recession on the back of elevated inflation and a cost-ofliving crisis.

“There is no doubt it has been a difficult few years, but today’s growth figures are proof that the economy is returning to full health for the first time since the pandemic,” said finance minister Jeremy Hunt.

“We’re growing this year and have the best outlook among European G7 countries over the next six years,” he insisted.

However, Labour finance spokesperson Rachel Reeves slammed the government’s stewardship of the economy, which has been blighted by the cost-of-living crunch.

Yesterday’s data came one day after the Bank of England kept its main interest rate at a 16-year high, but hinted at a cut over the summer as inflation cools further − and forecast emergence from recession in a bright outlook. (AFP)