The United Kingdom (UK) has exited the shallow recession it entered in the second half of 2023 after its economy increased by 0.6 per cent in the first quarter of 2024.
The Office for National Statistics, on Friday, May 10, said Britain’s Gross Domestic Product (GDP) expanded by 0.6 per cent in the three months to March, the strongest expansion since the fourth quarter of 2021 when it grew by 1.5 per cent.
A Reuters poll of economists had pointed to a 0.4 per cent expansion of GDP in the January-to-March period, after GDP shrank by 0.3 per cent in the final quarter of 2023.
Friday’s data will be welcome news for Prime Minister Rishi Sunak who said the economy had “turned a corner”.
However, the opposition Labour Party, which has a large lead in opinion polls, has accused Sunak and finance minister Jeremy Hunt of being out of touch to think voters are feeling better off.
UK enters recession after GDP fall
“There is no doubt it has been a difficult few years, but today’s growth figures are proof that the economy is returning to full health for the first time since the pandemic,” Hunt said.
The Bank of England, which held interest rates at a 16-year high on Thursday, forecast quarterly growth of 0.4 per cent for the first quarter of this year and a smaller 0.2 per cent rise for the second quarter.
Sterling strengthened against the U.S. dollar immediately after the figures were released.
On a monthly basis, the economy grew by 0.4 per cent in March, faster than the 0.1 per cent growth forecast by economists in a Reuters poll.
Britain remains one of the slowest countries to recover from the effects of the coronavirus pandemic.
At the end of the first quarter of 2024, the country’s economy was just 1.7 per cent bigger than its level in late 2019, before the pandemic, with only Germany among the G7 faring worse.
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