The UK economy grew 0.2% year on year and 0.6% sequentially in the first quarter of 2024, officially putting recession fears to rest after slipping at the end of 2023.
Britain’s economy grew at its fastest rate for two years in the first three months, with the 0.6% quarter-on-quarter growth rate eclipsing market forecasts of 0.4%.
Services grew 0.7%, production 0.8% and construction 0.9%.
"Encouragingly, the UK’s economic growth seen so far this year is broad-based across both manufacturing and services. Meanwhile, confidence among both businesses and consumers has grown,” said Rob Morgan, chief investment analyst at Charles Stanley (LSE:CAY).
“Having battled the impact of stubborn inflation and high interest rates, many households are now starting to reap the benefits of inflation falling more rapidly than wage growth.”
But Morgan warned that it’s still “a lacklustre situation. Zooming out to the bigger picture, the economy is likely to continue to tread a steady but underwhelming path and requires productivity gains to set it on a steeper growth trajectory”.
Chancellor Jeremy Hunt told the BBC: "Today's growth figures are proof that the economy is returning to full health for the first time since the pandemic".
"For families who have been having a really tough time, I think they can see that the very difficult decisions that we've taken in order to get the economy back on its feet after the pandemic, after the energy shock, are beginning to pay off and we need to see them through."
Labour's shadow chancellor, Rachel Reeves responded that this was "no time for Conservative ministers to be doing a victory lap".