UK Economy Exits Recession as GDP Grows at 0.6% in First Quarter

The U.K. economy has finally emerged from a recession as official figures showed that gross domestic product increased by 0.6% in the first quarter, which exceeded expectations. The U.K. had entered a shallow recession in the second half of 2023, due to persistent inflation that was hurting the economy. Although there is no official definition of a recession, two consecutive quarters of negative growth are usually considered indicative of a technical recession.

During the period from January to March, the U.K.’s production sector experienced growth of 0.8%, while the construction sector saw a decline of 0.9%. In March alone, the economy grew by 0.4%, following a 0.2% expansion in February.

The Bank of England’s Monetary Policy Committee had issued a warning on Thursday regarding persistent inflation indicators, stating that they “remain elevated.” The committee decided to keep the main interest rate at 5.25%. The central bank predicted that headline inflation would be close to 2% in the near-term, but expected a slight increase later in the year as the effects of a sharp decline in energy prices diminished. This is a developing news story and updates will be provided shortly