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UK economy expands slightly faster than expected in first quarter

The UK economy grew slightly faster than expected in the first quarter of the year, new figures from the Office for National Statistics show.

Gross domestic product (GDP) expanded 0.7% in the first three months of the year, stronger than the 0.6% first estimate.

This follows falls in the previous two quarters, including a 0.3% decline at the end of last year, which had left the economy in a shallow technical recession.

First quarter GDP was also up 0.3% versus the first quarter of last year, which also bettered the consensus forecast of 0.2%.

In output terms, services grew by 0.8% versus the preceding quarter with widespread growth across the sector, ONS said, while the production sector grew by 0.6% and the construction sector fell by 0.6%.

Real households’ disposable income (RHDI) is estimated to have grown by 0.7% in Quarter 1 2024, maintaining the same growth as the previous quarter.

Economists said it was good news for whoever is Prime Minister after next week's election but could make the Bank of England wait longer before cutting interest rates.

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