UK emerges from recession with 0.6% growth in first quarter
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Britain's economy emerged from last year's technical recession with a better-than-expected 0.6% growth in the first quarter, providing welcome economic news for Rishi Sunak ahead of a general election expected later this year.
The quarter-on-quarter growth rate released by the Office for National Statistics on Friday compared with expectations of 0.4% from both the Bank of England and economists polled by Reuters.
This also marked a recovery from the technical recession in the second half of 2023, when production fell for two consecutive quarters.
Mr Sunak, who has pledged economic growth, is expected to welcome the figures. Opinion polls show the Prime Minister's Conservative Party trailing Labor by about 20 points.
The UK figures were released after the eurozone recorded growth of 0.3% in the first quarter and the US of 0.4%.
UK growth in the latest quarter was driven by a 0.7% increase in services output. Manufacturing output rose 1.4%, led by auto production, which increased for the sixth consecutive quarter.
On Thursday, the Bank of England announced that economic growth is expected to pick up over the next three years, following last year's slump. The central bank kept interest rates unchanged at 5.25%, the highest level in 16 years, but signaled it could cut rates this summer if inflation remains low.
Commenting on the GDP figures, Liz McCune, Head of Economics and Statistics at the ONS, said: “The UK economy returned to positive growth in the first three months of this year after two quarters of contraction.
“Retail, public transport and shipping, and the health industry all performed well, with a broad range of strong performance across the services industry. Automakers also had a strong quarter. These were offset by another quarter of weakness in the construction sector. It just offsets it a little bit.”
Prime Minister Jeremy Hunt said: “It has undoubtedly been a difficult few years, but today's growth rates demonstrate that for the first time since the pandemic, the economy is returning to full health.”
Summarize this content to 100 words Unlock Editor's Digest for freeFT editor Roula Khalaf has chosen her favorite stories in this weekly newsletter.Britain's economy emerged from last year's technical recession with a better-than-expected 0.6% growth in the first quarter, providing welcome economic news for Rishi Sunak ahead of a general election expected later this year.The quarter-on-quarter growth rate released by the Office for National Statistics on Friday compared with expectations of 0.4% from both the Bank of England and economists polled by Reuters.This also marked a recovery from the technical recession in the second half of 2023, when production fell for two consecutive quarters.Mr Sunak, who has pledged economic growth, is expected to welcome the figures. Opinion polls show the Prime Minister's Conservative Party trailing Labor by about 20 points.The UK figures were released after the eurozone recorded growth of 0.3% in the first quarter and the US of 0.4%.UK growth in the latest quarter was driven by a 0.7% increase in services output. Manufacturing output rose 1.4%, led by auto production, which increased for the sixth consecutive quarter. On Thursday, the Bank of England announced that economic growth is expected to pick up over the next three years, following last year's slump. The central bank kept interest rates unchanged at 5.25%, the highest level in 16 years, but signaled it could cut rates this summer if inflation remains low.Commenting on the GDP figures, Liz McCune, Head of Economics and Statistics at the ONS, said: “The UK economy returned to positive growth in the first three months of this year after two quarters of contraction.“Retail, public transport and shipping, and the health industry all performed well, with a broad range of strong performance across the services industry. Automakers also had a strong quarter. These were offset by another quarter of weakness in the construction sector. It just offsets it a little bit.”Prime Minister Jeremy Hunt said: “It has undoubtedly been a difficult few years, but today's growth rates demonstrate that for the first time since the pandemic, the economy is returning to full health.”
https://www.ft.com/content/e856ffbd-3b96-4ca3-8e03-47a96b8d035e UK emerges from recession with 0.6% growth in first quarter
