The UK emerges from recession with greater-than-expected growth through March

The British economy recorded its highest growth in nearly three years in the first quarter of the year, ending the recession it entered in the second half of last year.

According to the Office for National Statistics, GDP grew by 0.6% quarter-on-quarter to March, the largest expansion since the fourth quarter of 2021, when it grew by 1.5%. Economists expected a 0.4% rise, according to a Reuters poll. Compared to last year, the increase amounted to 0.2% on an annual basis.

The economy declined by 0.3% in the fourth quarter of 2023, after 0.1% in the third quarter, which is a technical recession. “The economy has taken a turn,” Prime Minister Rishi Sunak said on social media. “We know things are still difficult for a lot of people,” he said. Finance Secretary Jeremy Hunt added: “There is no doubt it has been a difficult few years, but today’s growth figures are evidence that the economy is returning to health for the first time since the pandemic.”

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Rafael Ramos

The UK remains one of the slowest countries to recover from the effects of coronavirus. At the end of the first quarter, the country’s economy was only 1.7% larger than its level at the end of 2019, and only Germany, among the G7 countries, performed worse. Between January and March, services, the engine of the British economy, expanded by 0.7% and industrial production by 0.8%, despite construction falling by 0.9%.

In this way, the UK economy grew twice as much as the eurozone in the first quarter of 2024 (0.3%) and more than two-tenths of that of the US (0.4%).

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Waiting for inflation and prices

The Bank of England, which on Thursday kept interest rates at a 16-year high of 5.25%, forecast growth of 0.5% for this year and 1% in 2025. Liz McKeown, director of economic statistics at the Office for National Statistics, said: “With a strong performance in… Retail, public transport and health.

The central bank was “optimistic” about lower inflation, which today stands at 3.2%, a high level but far from 11% at the end of 2022. This should allow it to cut interest rates in the coming months and thus ease the measure. This affects the finances of families and businesses, as mortgages and financing become much more expensive.

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