UK Exits Recession As GDP Surges Past Expectations

Britain’s economy emerged from a short-lived recession in the first quarter with stronger-than-anticipated growth, upwardly revised data showed Friday, lifting embattled Prime Minister Rishi Sunak before next week’s general election.

Gatekeepers News reports that the Gross domestic product grew 0.7 per cent in the first three months of this year, the Office for National Statistics said, upgrading the prior growth estimate of 0.6 per cent. Market expectations had been for no change.

The surprise modest improvement was driven by the services sector, with slightly stronger activity in the professional services, transport and storage.

The upbeat news comes as Sunak’s Conservatives are badly trailing the main opposition Labour Party, led by Keir Starmer, ahead of nationwide polls due next Thursday.

“This is certainly good news for whoever will be the Prime Minister this time next week,” noted Paul Dales, chief UK economist at research consultancy Capital Economics.

However, the ONS revealed earlier this month that the UK economy had stagnated in April with zero growth, but the performance was hit by wet weather.

The economy contracted slightly for two quarters in a row in the second half of 2023, meeting the technical definition of a recession that was caused by elevated inflation that has prolonged a cost-of-living crisis.

Britain votes on July 4 in an election widely expected to be won by Labour, a victory that would end 14 years of rule by Conservatives, who have been led by Sunak since 2022.

AFP