The UK economy has exited its recession, as confirmed by figures from the Office for National Statistics (ONS) issued this morning.
GDP grew by 0.6% between January and March, surpassing the expectations of economists who had forecasted a growth of 0.4%.
The services sector, which constitutes a significant portion of the UK economy, experienced growth of 0.7%, contributing to the overall GDP increase. The production sector also saw a rise, growing by 0.8%. However, the construction sector faced challenges, declining by 0.9% over the quarter.
This growth in GDP marks a significant rebound from the previous two quarters, where the economy had contracted by 0.3% and 0.1% respectively, leading to a recession declaration in February.
The downturn had been attributed to diminished consumer spending power amid rising inflation and high energy costs, with adverse weather conditions also playing a role in dampening retail activity.
Unlike the protracted recessions of the past, such as those following the global financial crash, this recent recession was anticipated to be brief.
Amy Knight, personal finance expert and small business commentator at NerdWallet UK, said: “As we pull further away from last winter’s technical recession, Britain’s economy may be looking a little healthier. Yet despite economic growth, word on the street is that household finances aren’t feeling so flash, particularly for those seeking a mortgage.Â
“Concerns that inflation is proving stickier than expected have led mortgage lenders to up their rates in anticipation of yesterday’s ‘no change’ decision from the Bank of England, which maintained the base rate at 5.25%. While some first-time buyers will continue waiting for rates to fall, those in a hurry to get on the property ladder may be forced to stretch their budget even further.
“It’s hard to hear ‘good news’ about the economy ‘recovering’ if your personal financial situation is still painful. The cost of living continues to wear people down despite optimism among economists and pressure to pay for life’s essentials – from rising water bills to higher childcare costs – continues to make money a sore subject for many people.”
