UK out of recession
THE economy rebounded of recession with faster-thanexpected growth over the first quarter of 2024, according to official figures.
The Office for National Statistics said gross domestic product (GDP) is estimated to have risen by 0.6% between January and
March. It comes after two quarters of decline – which represents a technical recession – in the back half of 2023.
A consensus of economists had predicted a 0.4% improvement for the latest quarter.
ONS director of economic statistics Liz Mckeown said: “After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year. There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well.
“Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.”
It represented the strongest quarterly growth since the fourth quarter of 2021. The performance was particularly driven by improvements in the services and production sectors, which grew by 0.7% and 0.8% respectively.
There was notable growth for the human health and social services sector, administrative and support services, as well as for wholesale and retail firms.
Construction output, however, fell during the month, but its 0.4% drop represented a significant reduction in decline after a 2% fall in February.
Rishi Sunak has insisted that “things are starting to feel better” and that confidence in the economy is growing.
Speaking at a visit to a business in Oxfordshire, the Prime Minister said: “After undoubtedly a difficult couple of years that the country has had, actually now things are starting to feel better.
“Confidence is returning to the economy and the country, and I hope that you’re starting to feel that too.”
It came a day after the Bank of England’s monetary policy committee held interest rates at 5.25% and slightly upgraded its forecast for UK economic growth.
Chancellor Jeremy Hunt said: “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.
“We’re growing this year and have the best outlook among European G7 countries over the next six years, with wages growing faster than inflation.”
Labour’s shadow chancellor Rachel Reeves said: “This is no time for Conservative ministers to be doing a victory lap and telling the British people that they have never had it so good.
“The economy is still £300 smaller per person than when Rishi Sunak became Prime Minister.”