UK Economy Exits Recession with Q1 GDP Growth

The UK economy has officially exited recession, with a 0.6% growth in GDP from January to March. This marks a significant turnaround from the previous two quarters, which saw a decline in GDP.

UK economy growth

According to the latest figures, real gross domestic product (GDP) increased by 0.4% in March 2024, following a 0.2% rise in February. This growth is attributed to a broad-based strength across service industries, including retail, public transport, and haulage, as well as a good quarter for car manufacturers.

“After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year,” said Liz Mckeown, ONS director of economic statistics.

The construction sector, however, remains a weak spot, with a 0.9% decline in the quarter. This is largely due to the ongoing impact of higher interest rates and the pandemic on the commercial sector.

Construction sector decline

Despite this, experts are optimistic about the economy’s growth prospects. “The economy is growing faster than expected,” said Nicholas Hyett, investment manager at Wealth Club. “The broad base of growth is reassuring, with positive developments across everything from retail to manufacturing.”

The Bank of England is likely to be pleased with the latest figures, which may reduce the likelihood of a rate cut in the near future.

UK economy growth

The UK’s exit from recession is a welcome development, and the latest GDP figures suggest that the economy is on a strong growth trajectory.