In the first quarter of 2024, Britain experienced stronger than expected growth, marking its exit from recession. The gross domestic product (GDP) expanded by 0.6%, surpassing market projections of 0.4%, according to the Office for National Statistics (ONS). The UK economy had faced challenges in the last two quarters of 2023, with stubborn inflation and rising living costs. GDP had contracted by 0.3% in the fourth quarter of 2023 and by 0.1% in the third quarter. Prime Minister Rishi Sunak hailed this growth as a sign that the economy is turning around, as the Conservative Party prepares for elections this year.
Chancellor of the Exchequer Jeremy Hunt expressed optimism about the future, stating that the economy is on a path to recovery following the challenges of the pandemic. However, Labour’s shadow finance minister Rachel Reeves criticized the Conservative Party for their handling of the economy, emphasizing the impact of the cost-of-living crisis on households. Despite the positive growth figures, Britain’s post-pandemic recovery has been sluggish compared to other G7 countries, with only Germany faring worse.
The Bank of England maintained its main interest rate at a 16-year high but hinted at the possibility of a future rate cut. The economic outlook remains uncertain as Britain continues to navigate the challenges of post-pandemic recovery.