UK is no longer in recession, official figures show | Business News

The UK economy is no longer in recession, according to official data.

Gross Domestic Product (GDP) grew 0.6% better than expected between January and March, reported the Office for National Statistics (ONS).

Economists, in a Reuters poll, predicted the number would be 0.4%.

Prime Minister Rishi Sunak said it showed the economy had “turned a corner”.

He added: “We know things are still difficult for many people, but the plan is working and we must stick to it.”

A recession, which is defined as two consecutive three-month periods in which the economy contracts, was declared in February.

It came after the ONS said GDP, an important measure of economic growth, shrank by 0.3% between October and December. There followed a 0.1% contraction in the three months from July to September.

The drop was attributed to the reduction in consumers’ purchasing power amid high inflation and energy bills. Months of rain also contributed to keeping buyers at home, commentators said.

Friday’s latest figures also revealed better-than-expected growth for March. GDP grew 0.4% during the month, higher than economists’ forecast of 0.1%.

GDP growth numbers for February were also revised upwards by the ONS, from 0.1% to 0.2%.

While previous recessions have been long-lasting – such as during the global financial crisis of 2008 and 2009 – the most recent one was expected to be short-lived.

Economy ‘returning to full health’

Chancellor Jeremy Hunt said: “There’s no doubt it’s 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 are growing this year and have the best prospects among the G7 European countries for the next six years, with wages growing faster than inflation, energy prices falling and tax cuts worth £900 for the average worker hitting bank accounts.”

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ONS director of economic statistics Liz McKeown said: “There was broad-based strength across all services sectors, with retail, public transport and transport, and healthcare all performing well.

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

“In March, the economy grew robustly, led, once again, by services, with wholesalers, the health sector and the hotel sector, all doing well.”

The latest figures come after the Bank of England kept interest rates at 5.25% on Thursday and released new forecasts for the UK economy.

The Bank projected that growth would be stronger this year, with unemployment and inflation rates lower than previously expected.

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