The U.K.’s economy has emerged from a recession as official figures showed that gross domestic product increased by 0.6% in the first quarter, exceeding expectations. Despite persistent inflation hurting the economy, the U.K. had entered a shallow recession in the second half of 2023, due to two consecutive quarters of negative growth being considered indicative of a technical recession.
During the period from January to March, the U.K.’s production sector experienced growth of 0.8%, while the construction sector saw a decline of 0.9%. In March alone, the economy grew by 0.4%, following a 0.2% expansion in February.
The Bank of England’s Monetary Policy Committee issued a warning on Thursday regarding persistent inflation indicators, stating that they “remain elevated.” The committee decided to keep the main interest rate at 5.25%. The central bank predicted that headline inflation would be close to 2% in the near-term, but expected a slight increase later in the year as the effects of a sharp decline in energy prices diminished.
This is an evolving news story and updates will be provided shortly.
