Figures from the Office for National Statistics show the UK economy has rebounded after a period of recession.
After two quarters of decline in 2023, the UK economy was officially in recession.
GDP fell by 0.1% between July and September 2023 and by 0.3% between October and December. It was the shallowest and shortest period of recession on record.
Economists had widely predicted 0.4% growth for the first quarter of 2023.
Instead, today the Office for National Statistics (ONS) put growth at 0.6%, meaning the UK is out of recession.
This is the strongest growth in a quarter since 2021.
Growth was particularly boosted my improvements in service and production industries, which increased by 0.7% and 0.8% respectively.
ONS Director of economic statistics Liz McKeown said: “There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well.”
It comes a day after the Bank of England’s monetary policy committee held interest rates at the 16-year high of 5.25%.
The Bank did upgrade the forecast for the UK’s economic growth, though, estimating that GDP will increase by 0.5% this year and 1% in 2025. This is a 0.25 percentage point increase from the Bank’s estimates in February.
The Political Response
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.”
“…today’s growth figures are proof that the economy is returning to full health” – Chancellor Jeremy Hunt
Labour’s Shadow Chancellor Rachel Reeves said: “There 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.”
In anticipation of the ONS’s announcement today Chancellor Rachel Reeves said that the Conservative Party were trying to “gaslight” the public on the economy.
Labour cites GDP per capita figures – calculated by dividing GDP by the total population. Ms Reeves said
The economy is still £300 smaller per person than when Rishi Sunak became Prime Minister
On X, formerly known as Twitter, Prime Minister Rishi Sunak said “we know things are still tough for many people, but the plan is working, and we must stick to it.”
The economy has turned a corner. Today's news proves that.
We know things are still tough for many people, but the plan is working, and we must stick to it.
— Rishi Sunak (@RishiSunak) May 10, 2024
