The UK economy has bounced back from last year’s technical recession with a faster than expected growth rate of 0.6 per cent in the first quarter, providing a much-needed boost for Chancellor Rishi Sunak ahead of the general election. The growth figure surpassed the 0.4 per cent forecast by the Bank of England and economists, marking the fastest quarter-on-quarter growth since 2021.
The Office for National Statistics released the GDP numbers on Friday, signaling the UK’s formal recovery from the shallow recession experienced in the second half of 2023. The growth was driven by a 0.7 per cent increase in services output and a 1.4 per cent growth in manufacturing, particularly in car production.
Chancellor Jeremy Hunt expressed optimism, stating that the economy is returning to full health for the first time since the pandemic. The positive growth figures come as a relief for Sunak, who has made economic growth a key focus of his tenure.
Commenting on the GDP figures, Liz McKeown, ONS director of economic statistics, highlighted the broad-based strength across various service industries, with retail, public transport, and health performing well. However, construction saw another weak quarter.
The news of the UK’s economic recovery comes after the Eurozone recorded 0.3 per cent growth in the first quarter, with the US registering 0.4 per cent. Economists are optimistic about continued growth for the rest of the year, with expectations of a recovery in exports and household consumption. Despite the positive outlook, the UK economy still lags behind the US and Eurozone in terms of growth relative to pre-pandemic levels.