Exit from recession was stronger than first thought, official figures show

The UK's exit from recession during the first three months of the year was stronger than initial figures suggested, according to official data.

Exit from recession was stronger than first thought, official figures show

In an update on its first growth estimate, the Office for National Statistics (ONS) said gross domestic product (GDP) rose by 0.7% between January and March.

It had originally said on 10 May that output was 0.6% up on the previous three months - a positive figure that brought to an end the shallow recession that struck during the second half of 2023.

Then, the effects of Bank of England interest rate rises to combat inflation were widely blamed by economists for choking of demand.

All the growth during the January-March period was attributable to the services sector, which accounts for almost 80% of the economy.

We have since learned that there was zero growth recorded by the ONS for the month of April, with poor weather hitting construction and high streets.

The data is the last from the ONS before the country goes to the polls on 4 July - with the economy, and personal finances especially, among the topics high on voters' minds following the effects of the COVID pandemic and energy-driven cost of living crisis.

The timing of the general election has coincided with fierce debate over whether the Bank should now be cutting interest rates, allowing for an easing in borrowing costs.

At its last policy meeting just over a week ago, the rate-setting committee voted 7-2 to maintain Bank rate at 5.25%.

The minutes of the meeting betrayed continuing worries about the pace of wage growth and stubborn inflation within services.

The Bank fears that a rate rise, at this stage, risks fuelling price growth further as basic salaries grow at a pace of 6%.

The rate of inflation is currently back at its 2% target for the first time in three years.

As things stand, financial markets and economists see August or September as the likely months for the first rate cut, barring any new shocks.

The Bank estimated last week that the economy would expand by 0.5% in the April-to-June period, despite the lag reported for April itself.

This breaking news story is being updated and more details will be published shortly.

Please refresh the page for the fullest version.

You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news.