The UK economy has recovered from a short-lived recession, according to official figures released on Friday by the Office for National Statistics (ONS).
Gross domestic product (GDP) grew by a better-than-expected 0.6% between January and March, surpassing economists’ forecasts of 0.4% growth.
This positive growth marks an end to the technical recession declared in February, which was characterised by two consecutive quarters of economic contraction.
The previous slump, with GDP shrinking 0.3% between October and December 2023 and 0.1% between July and September 2023, was attributed to reduced consumer spending power amid high inflation and energy bills, as well as unfavourable weather conditions.
The latest GDP figures also revealed a stronger-than-anticipated 0.4% growth in March, exceeding the 0.1% forecast by economists. Additionally, the ONS revised February’s GDP growth upwards from 0.1% to 0.2%.
Nicholas Hyett, Investment Manager at Wealth Club, commented, “An upgrade to February’s growth estimate and strong performance in March means the 2023 recession is rapidly receding in the rear view mirror – ending almost as soon as it had started.”
The growth was broad-based, with positive developments across various sectors, including retail and manufacturing. However, construction remained a weak spot, particularly in the commercial sector, reflecting the impact of higher interest rates and the ongoing shift towards remote work and online shopping.
The Bank of England is expected to welcome these figures, as a rate cut may now appear premature, given the economy’s healthy performance.
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