UK economy recovery stronger than thought at start of 2024, reveals revised data
Revised figures showed the economy grew by more than had been previously thought in the first quarter of 2024
The UK economy’s recovery from recession was stronger than previously thought, according to updated data.
The Office for National Statistics (ONS) revealed in revised figures on Friday morning that UK gross domestic product (GDP) grew by 0.7% between January and March. In May, the statistics body estimated that the economy had grown by 0.6% over the quarter.
This growth saw the UK economy rebound from a recession in the latter half of 2023, after the ONS previously confirmed two consecutive quarters of decline. The economy shrank by 0.1% in the third quarter, and 0.3% in the fourth quarter.
The improvement in growth shown in the revised data was driven by the services sector, with slightly stronger activity in the professional services, transport and storage sectors. It found the services industry expanded by 0.8% for the quarter, up from previous estimates of 0.6%.
Meanwhile, the production sector grew by 0.6% and construction declined by 0.6% for the period. The quarterly growth was the strongest the UK has witnessed since the end of 2021.
It presents potentially positive news for the Prime Minister Rishi Sunak ahead of next week’s General Election, after previously pledging to grow the economy. Mark Preskett, senior portfolio manager at Morningstar Wealth, said: “The upward revision to the UK’s Q1 GDP is encouraging and further evidence that the UK economy is recovering.
“The services upgrade – to 0.8% from 0.7% – backs what we have been seeing in inflation data.” Nevertheless, the ONS revealed earlier this month that the economy then stagnated in April, with no growth for the month as consumer spending was affected by wet weather.
Economists still expect growth for the current quarter, however. Thomas Pugh, economist at RSM UK, said: “All the data suggests that the economy is set to continue to rise in Q2.
“We then expect growth to accelerate in the second half of this year and into 2025 as sharply lower inflation, tax cuts and falling interest rates give households an income boost.”