The UK economy has shown a positive sign of growth after avoiding recession, with a 0.6 per cent increase in the first quarter of the year, according to the Office for National Statistics. This growth was stronger than predicted by economists who had forecasted a 0.4 per cent improvement.
The positive trend comes after two quarters of decline in the latter half of 2023, which signifies a technical recession. Chancellor Jeremy Hunt commented on the GDP figures and said that the economy is slowly starting to return to full health for the first time since the pandemic. He highlighted the UK’s strong growth prospects compared to other G7 countries and emphasized benefits such as rising wages, falling energy prices, and tax cuts for workers.
The growth was driven by improvements in both services and production sectors, with notable contributions from human health, social services, and retail. Despite this overall positive trend, construction output saw a slight decline during the quarter; however, it was less significant compared to the previous month. ONS director Liz McKeown noted that the positive growth was mainly driven by strength in service industries such as retail, public transport, health, and car manufacturers.
Labour’s shadow chancellor Rachel Reeves cautioned against celebrating too soon while reminding that despite this progression towards economic recovery, it is still smaller than it was before Rishi Sunak became Prime Minister.
