- ORIGINAL NEWS
UK economy emerges from recession with 0.6% growth in first quarter
- SUMMARY
The UK economy has officially ended its recession and emerged with positive growth in the first quarter of 2024.
Gross domestic product, a measure of the country’s overall economic activity, rose by 0.6%, exceeding economists’ expectations.
Despite ongoing inflation, the services sector, which dominates the UK economy, has shown signs of recovery for the first time since early 2023.
The transport services industry in particular experienced its highest quarterly growth rate since 2020.
The construction sector declined by 0.9%, but the production sector grew by 0.8%.
Prime Minister Rishi Sunak is encouraged by the news, stating that the economy has “turned a corner.”
However, Suren Thiru of ICAEW cautions that the recovery may be fragile due to political uncertainty leading up to upcoming elections.
The Bank of England remains vigilant against inflation, keeping its main interest rate unchanged at 5.25%.
The central bank expects inflation to remain elevated in the near term but anticipates a slight increase later in the year as the effects of declining energy prices diminish.
While the UK has exited recession, economists express concerns about the economy’s long-term growth prospects, which are hindered by issues such as low productivity and high economic inactivity.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“The U.K. economy has emerged from recession as gross domestic product rose 0.6% in the first quarter, official figures showed Friday, beating expectations.”
“In output terms, the services sector — crucial to the U.K. economy — grew for the first time since the first quarter in 2023, the Office for National Statistics said.”
Negative
“Economists polled by Reuters had forecast growth of 0.4% on the previous three months of the year.”
“U.K. Prime Minister Rishi Sunak, whose Conservative Party recently suffered significant losses at local elections, welcomed the news. “The economy has turned a corner,” he said in a post on social media platform X.”