Official Figures Confirm End of UK Recession
Gross domestic product grew by a better-than-expected 0.6% between January and March. Prime Minister Rishi Sunak says it proves the economy has “turned a corner,” but opposition parties insist there is little cause for celebration.Official Figures Confirm End of UK Recession
Gross domestic product (GDP) grew by a better-than-expected 0.6% between January and March, the Office for National Statistics (ONS) said.
Economists had predicted the figure would be 0.4%.
Prime Minister Rishi Sunak said it showed the economy had “turned a corner,” adding: “We know things are still tough 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 where the economy contracts, was declared in February.
It came after the ONS said GDP, a major measure of economic growth, shrank 0.3% percent between October and December. It followed a contraction of 0.1% in the three months from July to September.
The slump was blamed on reduced consumer spending power amid high inflation and energy bills. Months of wet weather also contributed to keeping shoppers at home, commentators said
Economy ‘returning to full health’
Chancellor Jeremy Hunt described the figures as “encouraging” and said it showed that the economy was “returning to full health”.
He told News: “I think that for families who have been struggling, this is good news.” He added: “It indicates that difficult decisions we’ve made recently are beginning to pay off and we need to continue with them.”
“We’re seeing that inflation is falling faster and I think people recognise it’s been a very, very challenging period, but they don’t vote for Conservative governments for us to do popular things.
“They trust us to do the right thing for the long-term benefit of the economy and that is what we’ve been doing.”
However, opposition parties said there was little cause for celebration.
Labour’s shadow chancellor, Rachel Reeves, said: “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.”
Lib Dems Treasury spokesperson Sarah Olney MP said: “This Conservative Government crashed the economy and sent mortgages spiralling.
“If Rishi Sunak thinks hard-hit households will be celebrating today, he is even more out of touch than we thought.”
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According to Liz McKeown, the head of economic statistics at the ONS, all service industries displayed robust growth, with retail, public transportation and haulage, and health sectors leading the way in strong performance.
“Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.
“In the month of March the economy grew robustly led, again, by services with wholesalers, the health sector and hospitality all doing well.”
Ruth Gregory from Capital Economics commented on the figures. She indicated that the UK’s economic recovery might be stronger than earlier forecasts.
She added: “All the early indicators suggest that GDP growth rose robustly in April as well.
“At the margin, this may mean the Bank of England doesn’t need to rush to cut interest rates.The next inflation release will determine the timing of the first interest rate cut. The labor market releases will also be a factor in this decision.
The Bank of England kept interest rates at 5.25% on Thursday. The latest figures come after the bank issued 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.