UK emerges from recession after 0.6% growth

The current skyline of the City of London. The services sector grew by 0.7 per cent in the first quarter as the UK emerged from a technical recession. Photo: City of London Corporation

The UK has exited the technical recession it fell into at the end of last year, according to the Office for National Statistics (ONS).

Following two quarters of negative growth up to the end of December 2023, the latest data shows that the British economy grew by 0.6 per cent in the first quarter of this year, beating economists’ forecasts.

The services sector did the heavy lifting, growing by 0.7 per cent on the quarter with widespread growth across the sector. However, construction continued to struggle, falling by 0.9 per cent.

“There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well,” said Liz McKeown, ONS director of economic statistics.

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

On a monthly basis, the real GDP is estimated to have grown by 0.4 per cent in March, following a growth figure of 0.2 per cent in February and 0.3 per cent in January.

UK Chancellor, Jeremy Hunt said the latest figures were “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,” he added.

While business groups welcomed the more positive economic data, they were quick to point out that the sustainability of the recovery needs proper government action.