UK exits recession with fastest growth in two years

The UK economy rebounded from recession with stronger-than-expected growth in the first quarter of the year.

Official data revealed a 0.6% expansion between January and March, marking the fastest pace of growth in two years.

After experiencing consecutive quarters of contraction in the previous year, the UK’s emergence from recession was hailed by the chancellor as a sign of the economy “returning to full health.” However, Labour cautioned against premature celebration, emphasizing ongoing challenges faced by working people.

Andrew Bailey, governor of the Bank of England, acknowledged the economy’s turnaround but cautioned that it has yet to achieve a robust recovery.

Yael Selfin, chief economist at KPMG UK, expressed optimism about continued growth for the remainder of the year, citing factors such as falling inflation and rising wages as contributors to household income recovery and increased consumer spending.

According to Liz McKeown, director of economic statistics at the Office for National Statistics (ONS), the growth was broad-based, with strength observed across various service industries, including retail, public transport, and health. However, construction remained a weak spot.

The services sector, encompassing hospitality and entertainment, drove growth, likely buoyed by an early Easter compared to the previous year.

Anecdotal evidence suggests that consumers have been indulging in purchases like clothing and home furnishings, contributing to the economic upturn.

Meanwhile, Ed Beardwell, owner of RollQuick cycle shop in Bristol, noted a sense of improvement in business after a challenging winter. Despite concerns about cost sensitivity and theft affecting bicycle prices, Beardwell remains optimistic about the future.

The debate around the strength of the economic recovery is expected to feature prominently in the upcoming general election campaign.

While the chancellor hailed the growth figures as evidence of economic resurgence, Labour cautioned against premature celebration, highlighting ongoing economic challenges.

Liberal Democrat Treasury spokesperson Sarah Olney expressed tempered optimism, indicating that the figures warranted cautious assessment rather than outright celebration.