The economy of the United Kingdom has officially overcome recession earlier than expected in the first quarter of 2023, Africa Today News, New York reports.
According to official figures, the economy grew by 0.6 per cent between January and March, the fastest rate for two years.
Africa Today News, New York recalls that mid-last year, the UK economy slipped into recession after shrinking for two three-month periods in a row.
As at the time, the UK’s Gross Domestic Product, GDP, shrank by 0.3 per cent in the fourth quarter of 2023 after contracting 0.1 per cent in the previous three months, meeting the technical definition of a recession.
The development comes amid elevated inflation and a cost-of-living crisis, dealing a blow to Prime Minister Rishi Sunak before this year’s general election.
Accordingly, the Office for National Statistics noted that all main sectors shrank in the fourth quarter – with manufacturing, construction and wholesale being the biggest drags on growth – but added that the economy was broadly flat overall in 2023.
Sunak, whose governing Conservatives are trailing Keir Starmer’s main opposition Labour Party ahead of the election due this year, has pledged to grow the economy as one of his top five priorities.
Prime Minister Rishi Sunak said the economy had “turned a corner”, but Labour said this was no time for a “victory lap”.
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On Thursday, the governor of the Bank of England, Andrew Bailey, told the BBC that the UK was seeing a recovery, although it was not a strong one.
Interest rates have been at their highest for 16 years, meaning people are paying more to borrow money for things such as mortgages and loans, but savers have also received better returns.
The Bank on Thursday said that inflation, which measures the rate of prices rise, would fall close to its target level in the next couple of months. That had boosted expectations of a rate cut in June. However, the growth figures that were stronger than expected dampened those expectations.