Unlock the Editor’s Digest at no cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
The UK economic system has exited final 12 months’s technical recession with above expectations development of 0.6 per cent for the primary quarter, offering welcome financial information for Rishi Sunak forward of the overall election anticipated later this 12 months.
Friday’s Workplace for Nationwide Statistics determine for quarter-on-quarter development in contrast with the 0.4 per cent forecast by each the Financial institution of England and economists polled by Reuters.
It additionally marked a restoration from the technical recession of the second half of 2023, when output fell for 2 consecutive quarters.
The determine is about to be welcomed by Sunak, who has made financial development a signature pledge. The prime minister’s Conservatives path Labour by roughly 20 factors in opinion polls.
The UK information comes after the Eurozone recorded 0.3 per cent development for the primary quarter, with the US registering 0.4 per cent.
UK development within the newest quarter was pushed by a 0.7 per cent enhance in companies output. Manufacturing output grew 1.4 per cent, pushed by automotive manufacturing which has grown for six consecutive quarters.
On Thursday, the BoE mentioned that following weak point final 12 months, financial development was anticipated to select up over the following three years. The central financial institution held rates of interest unchanged at a 16-year excessive of 5.25 per cent however signalled it might reduce charges this summer season if inflation stayed low.
Commenting on the GDP figures Liz McKeown, ONS director of financial statistics, mentioned: “After two quarters of contraction, the UK economic system returned to optimistic development within the first three months of this 12 months.
“There was broad-based energy throughout the service industries with retail, public transport and haulage, and well being all performing nicely. Automotive producers additionally had a superb quarter. These have been solely somewhat offset by one other weak quarter for development.”
Jeremy Hunt, the chancellor, mentioned: “There isn’t any doubt it has been a troublesome few years, however at present’s development figures are proof that the economic system is returning to full well being for the primary time for the reason that pandemic.”
