The British economy recorded the highest growth in almost three years in the first quarter of the year, ending the recession it entered in the second half of last year.
According to the National Statistics Office, gross domestic product grew by 0.6% quarter-on-quarter until March, the largest expansion since the fourth quarter of 2021, when it grew by 1.5%. Economists expected an advance of 0.4%, according to a Reuters poll. Compared to last year, the advance is 0.2% year-on-year.
The economy had fallen 0.3% in the fourth quarter of 2023 after 0.1% in the third, a technical recession. “The economy has taken a turn,” Prime Minister Rishi Sunak said on his social networks. “We know that things are still difficult for many people,” he said. “There is no doubt that they have been a difficult few years, but today’s growth figures are proof that the economy is returning to health for the first time since the pandemic,” added Finance Minister Jeremy Hunt.
The United Kingdom remains one of the slowest countries to recover from the effects of covid. At the end of the first quarter, the country’s economy was only 1.7% larger than its level at the end of 2019, and only Germany, among the G7 countries, is performing worse. Between the months of January and March, services, the engine of the British economy, expanded by 0.7% and industrial production by 0.8%, although construction fell by 0.9%.
In this way, the United Kingdom economy grew twice as much as the eurozone in the first quarter of 2024 (0.3%) and two tenths more than the United States (0.4%).
The Bank of England, which this Thursday kept interest rates at their highest level in 16 years, at 5.25%, forecast growth of 0.5% for this year and 1% in 2025. “There was broad-based strength across all service sector industries, with strong performance in retail, public transport and health,” said ONS director of economic statistics Liz McKeown.
The central bank was “optimistic” about a reduction in inflation, today at 3.2%, a high level but far from the 11% at the end of 2022. This should allow it to lower its rates in the coming months and thus alleviate a measure that weighs on the finances of households and companies, with mortgages and financing much more expensive.
