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The UK economy has exited last year’s technical recession with above expectations growth of 0.6 per cent for the first quarter, providing welcome economic news for Rishi Sunak ahead of the general election expected later this year.
Friday’s Office for National Statistics figure for quarter-on-quarter growth compared with the 0.4 per cent forecast by both the Bank of England and economists polled by Reuters.
It also marked a recovery from the technical recession of the second half of 2023, when output fell for two consecutive quarters.
The figure is set to be welcomed by Sunak, who has made economic growth a signature pledge. The prime minister’s Conservatives trail Labour by roughly 20 points in opinion polls.
The UK data comes after the Eurozone recorded 0.3 per cent growth for the first quarter, with the US registering 0.4 per cent.
UK growth in the latest quarter was driven by a 0.7 per cent increase in services output. Manufacturing output grew 1.4 per cent, driven by car production which has grown for six consecutive quarters.
On Thursday, the BoE said that following weakness last year, economic growth was expected to pick up over the next three years. The central bank held interest rates unchanged at a 16-year high of 5.25 per cent but signalled it would cut rates this summer if inflation stayed low.
Commenting on the GDP figures Liz McKeown, ONS director of economic statistics, said: “After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year.
“There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well. Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.”
Jeremy Hunt, the chancellor, said: “There is no doubt it has been a difficult few years, but today’s growth figures are proof that the economy is returning to full health for the first time since the pandemic.”
