UK economy shows signs of recovery in February, indicating possible exit from recession | Business News

Britain’s economy is showing signs of recovery as it looks set to exit a shallow recession, with official data revealing growth for the second consecutive month in February. Gross domestic product expanded by 0.1% in monthly terms, in line with expectations, while January’s reading was revised higher to show growth of 0.3%.

The Office for National Statistics confirmed that the economy started 2024 on a stronger footing, with the three-month average growth rate rising to 0.2% in February, the highest reading since August. This positive trend is likely to ease concerns about a recession and reinforce the Bank of England’s cautious stance on interest rate cuts.

Finance minister Jeremy Hunt welcomed the data, stating that it is a sign that the economy is turning a corner. However, the opposition Labour Party criticized the Conservative government for low growth after 14 years in power.

Despite the tentative recovery, GDP remains below its level from June 2023, before the latest downturn. The services sector grew by 0.1% in February, while manufacturing output exceeded expectations with a 1.2% increase. However, construction saw a significant decline of 1.9%.

While the outlook is improving, economists warn that the longer-term challenges remain, including the impact of earlier interest rate hikes and supply chain constraints. The data suggests that Britain could escape recession even if GDP contracts sharply in March, assuming no revisions to prior months’ data.

Overall, the data paints a picture of a recovering economy, but one that still faces significant hurdles in the road to sustained growth.