The UK economy has shown a growth of 0.6% in the first quarter, indicating that it has emerged from the recession. This figure surpassed expectations, as economists had predicted a growth of 0.4% for the quarter. The UK had entered a shallow recession in the second half of 2023 due to persistent inflation that had been impacting the economy.
The Bank of England’s Monetary Policy Committee has stated that indicators of inflation persisting at elevated levels, resulting in the decision to keep the main interest rate at 5.25%. The central bank has forecasted that headline inflation will remain close to 2% in the short term but is expected to increase later in the year when the effects of a sharp decline in energy prices wear off.
While there is no official definition of a recession, it is generally understood as two consecutive quarters of negative growth. In this case, the UK’s production sector expanded by 0.8% from January to March, while construction experienced a decline of 0.9%. The overall economic growth for the month of March was at 0.4%, following a 0.2% expansion in February.
