Rare Win For Rishi Sunak As UK Economy Grows And Gets Out Of Recession
The UK economy grew by 0.6% in the first quarter of the year, after a period of recession at the end of 2023.
PM Rishi Sunak had an unexpected win on Friday when the Office for National Statistics announced the economy grew by 0.4% in March, with a growth 0.2% in February.
Gross domestic product (GDP) outgrew expectations this year – economists told Reuters news agency that they expected the overall figure to just by 0.4%.
This is the most significant economic growth the UK has seen since the end of the Covid pandemic.
The UK faced two consecutive three-month periods of economic contraction at the end of 2023, resulting in a short and shallow recession.
It also means the prime minister finally gets to tick off another one of his five pledges – “grow the economy”.
However, the overall picture for the country is still not so great – the OECD has forecast little extra growth for the UK over the next 18 months.
The think tank recently cut its forecast for its British GDP to 0.4% this year, down from 0.7%, making it the second-worst performer among the G7 nations.
It also reduced predictions for 2025 growth down to 1% from 1.2%, and thinks the UK will become the slowest growing economy in the G7.
Meanwhile, the Bank of England chose to keep interest rates high at 5.25% on Thursday too, following years of stubborn inflation rates.
Still, chancellor Jeremy Hunt said it had been “a difficult few years” but that the ONS stats showed “the economy is returning to full health for the first time since the pandemic”.
He added: “We’re growing this year and have the best outlook among European G7 countries over the next six years, with wages growing faster than inflation, energy prices falling and tax cuts worth £900 to the average worker hitting bank accounts.”
