At last some good news, we are not in recession!

BRITAIN is not in recession – having clocked up another quarter of growth over the spring, official figures revealed yesterday.

In a report that lifted some of the gloom hanging over the economy, the Office for National Statistics said output rose by 0.2 per cent between April and June.

That was a significant improvement on its preliminary estimate that the economy shrank by 0.1 per cent over the period.

The earlier assessment had left Britain on the brink of recession – defined as two consecutive quarters of decline. Even if output in Britain falls in the third quarter of July to September, as is feared, it will not officially be in recession following growth in the second.

That would only happen if there was another contraction in the final three months of the year.

The revised ONS report counters warnings last week from the Bank of England that Britain was already in recession.

Sandra Horsfield, an economist at Investec, hailed ‘a slight glimmer of hope after a tumultuous week in UK financial markets’. The more upbeat figures came as the pound rose back to where it was trading before last week’s minibudget that triggered days of turmoil on financial markets.

Having fallen from over $1.11 when Chancellor Kwasi Kwarteng announced his £45billion package of tax cuts last Friday to an all-time low of below $1.04 on Monday morning, sterling rose as high as $1.1234 yesterday. The pound also recovered losses against the euro to stand at €1.1423 before easing against both currencies later in the day.

Separate figures published by the EU’s official statistics agency showed eurozone inflation hit a record 10 per cent in September. That is worse than the UK’s 9.9 per cent. And prices are rising by 10.9 per cent in Germany, the highest for more than 70 years.

But the ONS also said that the slump felt during the Covid-19 pandemic was deeper than previously thought.

The economy declined by 11 per cent in 2020 and grew by 7.5 per cent in 2021, it said.

The ONS believes the economy is still 0.2 per cent smaller than before the pandemic – meaning Britain is the only country in the G7 group not to have fully recovered from the coronavito rus crisis. Paul Dales, chief UK economist at Capital Economics, said: ‘The good news is that the economy is not already in recession.

‘The bad news is that contrary to previous thinking, it still hasn’t returned

‘UK has still not recovered its mojo’

pre-pandemic levels. It’s the only G7 economy in that situation.’

Danni Hewson, financial analyst at investment platform AJ Bell, said: ‘It’s cold comfort to households struggling to pay their bills but revised figures suggest the UK economy is not in a recession.

‘But that good news is offset by the bad.

‘Despite the end of lockdowns and life returning to somewhat normal, the UK economy has still not recovered its mojo as the only G7 country to have failed to claw its way back above pre-pandemic levels.’