UK economy exits recession

The UK economy is no longer in recession after it grew by 0.6% between January and March this year, according to official figures from the Office for National Statistics (ONS).

The performance beat economist expectations of 0.4% growth. A recession, which is defined as two consecutive three-month periods where the economy contracts, was declared in February following declines of 0.1% and 0.3% in the final two quarters of 2023.

Compared with the same quarter a year ago, GDP is estimated to have increased by 0.2% in Quarter 1 2024.

In output terms, services grew by 0.7% in the quarter with widespread growth across the sector; elsewhere the production sector grew by 0.8% while the construction sector fell by 0.9%.

Overall, consumer-facing services grew by 0.6% in Quarter 1 2024, following a fall of 0.4% in Quarter 4 2023, which was largely driven by retail trade. Sales volumes increased by 1.9% in the three months to March 2024 when compared with the previous three months

In expenditure terms, there were increases in the volume of net trade, household spending and government spending, partially offset by falls in gross capital formation.

ONS director of Economic Statistics Liz McKeown said: “After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year. There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well. Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.

“In the month of March the economy grew robustly led, again, by services with wholesalers, the health sector and hospitality all doing well.”