Recession woes over as UK economy grows by 0.6%: 'The best among G7 countries!'

Recession woes over as UK economy grows by 0.6%: 'The best among G7 countries!'

Michael Wilson reacts to the UK coming out of recession

Patrick O'Donnell

By Patrick O'Donnell

Published: 10/05/2024

- 07:17

Updated: 10/05/2024

- 09:00

Figures from the ONS report the country's GDP jumped by 0.6 per cent between January and March

The UK economy is officially out of recession, according to the latest figures from the Office for National Statistics (ONS).

Gross domestic product (GDP) grew by 0.6 per cent between January and March after the country fell into recession in the later half of last year.

This comes after two consecutive quarters of negative economic growth which represents a "technical recession".

However, it appears Britain's economy has turned a corner with the Government hailing it as the "best outlook among European G7 countries.

In response to the figures, Chancellor Jeremy Hunt said: “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.

“We’re growing this year and have the best outlook among European G7 countries over the next six years, with wages growing faster than inflation, energy prices falling and tax cuts worth £900 to the average worker hitting bank accounts.”

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UK economy graph and happy stock trader

The UK economy grew last quarter


However, Labour's Shadow Chancellor Rachel Reeves hit back at Hunt's assertion that the economy is on the up.

She added: “This is no time for Conservative ministers to be doing a victory lap and telling the British people that they have never had it so good.

"The economy is still £300 smaller per person than when Rishi Sunak became Prime Minister."

Prior to today's announcement, a wide consensus of economists had forecast a 0.4 per cent improvement for the January to March quarter.

Liz McKeown, the ONS' director of economic statistics, outlined where this improvement in the figures has originated from.

McKeown said: “After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year.

“There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well.

“Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.”

This represents the strongest quarterly growth for the UK since the last quarter of 2021.

Notably, this improved performance can be contributable to growth in the services and production sectors, at 0.7 per cent and 0.8 per cent respectively.


Stock market trader happy and Bank of England

The UK is officially out of recession with the latest GDP growth


Outside of these sectors, there was notable growth in human health and social services sector, administrative and support services, as well as for wholesale and retail firms.

Despite this, growth in construction output drop over the last quarter.

It saw a 0.4 per cent drop but this represents a significant reduction in decline after a two per cent fall in February.

Even with GDP improving, interest rates remain at a 16-year high of of 5.25 per cent.

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