The UK economy has made a remarkable comeback after two consecutive quarters of decline at the end of 2023, thanks to a 0.6% growth rate in the first quarter of this year. This growth surpassed expectations, with economists originally forecasting only a 0.4% improvement.
Chancellor Jeremy Hunt expressed his optimism on the GDP figures, stating that despite the challenges faced over the past few years, the economy is showing signs of recovery since the pandemic. He highlighted several positive indicators such as faster wage growth compared to inflation, falling energy prices, and tax cuts benefiting workers.
The growth was driven by improvements in both services and production sectors, which expanded by 0.7% and 0.8% respectively. Notably, several sectors contributed to this positive performance, including human health and social services, administrative and support services, as well as wholesale and retail firms.
While construction output declined by 0.4% in March compared to February’s decline, it was a smaller decrease than expected. ONS director Liz McKeown noted that this return to positive growth in the UK economy after two quarters of contraction highlights broad-based strength across service industries like retail, public transport, health care and car manufacturing industries performed well.
In response to this economic data, Labour’s shadow chancellor Rachel Reeves urged caution against premature celebrations while emphasizing that there is still work to be done to fully recover from the impact of the pandemic. She pointed out that although it is true that we are now growing again but we are still smaller per capita than when Rishi Sunak became Prime Minister.
Overall, these figures indicate that despite recent challenges and setbacks, there is hope for recovery in the UK economy moving forward with continued effort towards sustainable growth pathway
