British Economy Bounces Back from Technical Recession, but High Interest Rates Continue to Hinder Growth

The British economy experienced a strong bounce back in the first three months of the year, putting an end to what economists had referred to as a “technical recession.” This growth was widespread across various sectors of the economy. Official figures released on Friday showed that the economy expanded by 0.6% in the first quarter, exceeding the 0.4% forecasted by economists. Despite this positive growth, the economy has only experienced minimal growth over the past year due to high interest rates, which have been at 5.25%, the highest in 16 years.

After two consecutive quarters of minor declines, there is optimism that high interest rates may be reduced in the near future. Bank of England Governor Andrew Bailey suggested that a rate cut could be implemented in June if inflation continues to decrease. While high interest rates have helped curb inflation, they have also had a negative impact on borrowing and economic growth.