UK economy returns to growth
Newsflash: Britain's short and shallow recession is over.
The UK economy grew by 0.6% in the first quarter of this year, according to a report from the Office for National Statistics.
This is a stronger growth than expected.
The ONS said the recovery was driven by the services sector and industry.
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In terms of output, services rose 0.7% quarter-over-quarter, with broad-based growth across sectors. In other regions, the production sector increased by 0.8%, while the construction sector decreased by 0.9%.
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On the spending side, increases in net trade, household spending, and government spending were partially offset by a decline in gross capital formation.
This rise in GDP means the economy is no longer in a technical recession after economic activity fell in the third and fourth quarters of last year.
important events
Hunt: The economy is returning to full health.
Minister of Finance Jeremy Hunt welcomed the news that the UK recession is over, saying:
“It has undoubtedly been a difficult few years, but today's growth rates demonstrate that the economy is returning to full health for the first time since the pandemic.
“Our country has grown this year and has the best outlook of any European G7 country for the next six years, with wages growing faster than inflation, energy prices falling and the average worker adding more to their bank account. There will be a tax reduction of £900 which will be transferred to
I hate to burst the prime minister's bubble, but the UK is also expected to be the worst performing economy in the G7 next year. Still, these predictions should be overturned…
ONS: Broad service growth last quarter
Oz Director of Economic Statistics liz mccune told Radio 4's Today program that the 0.6% growth recorded last quarter was stronger than people expected.
Compared to recent numbers, the last time we saw this much growth was in the last quarter of 2021. mccune I will explain.
mccune He pointed out that growth in the service sector was accelerating, but also pointed out that the construction industry had shrunk due to a decline in new construction.
mccune say:
“After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year.
“Retail, public transport and shipping, and the health industry all did well, and the services industry as a whole did well broadly. Automakers also had a strong quarter. These were driven by another weak quarter in construction. It was only slightly offset.
“The economy grew steadily in March, with wholesalers and services, the medical sector, and hospitality all doing well.”
The UK grew by 0.4% in March.
Monthly growth in March also exceeded expectations.
GDP rose by 0.4% marchThe ONS reported that this exceeded the city's 0.1% growth forecast.
The services sector had a strong month, growing by 0.5% year-on-year. march, output increased by 0.2%. However, construction output decreased by 0.4% in the same month.
February's GDP data has also been revised upwards to show growth of 0.2% (up from 0.1% originally expected).
UK economy returns to growth
Newsflash: Britain's short and shallow recession is over.
The UK economy grew by 0.6% in the first quarter of this year, according to a report from the Office for National Statistics.
This is a stronger growth than expected.
The ONS said the recovery was driven by the services sector and industry.
-
In terms of output, services rose 0.7% quarter-over-quarter, with broad-based growth across sectors. In other regions, the production sector increased by 0.8%, while the construction sector decreased by 0.9%.
-
On the spending side, increases in net trade, household spending, and government spending were partially offset by a decline in gross capital formation.
This rise in GDP means the economy is no longer in a technical recession after economic activity fell in the third and fourth quarters of last year.
GDP problem
Although GDP is the standard measure of economic activity, it has its critics.
It tracks what's happening across the economy, but it doesn't differentiate between harmful and beneficial activities.
Back in 1968, US presidential candidates bobby kennedy He scolded the chief executive, saying that GDP “measures everything except what has value.”
kennedy He told the University of Kansas.
A special lock is installed on our door, and a prison is provided for those who break it. It counts the destruction of sequoias and the loss of natural wonders due to sprawl.
It counts napalm, it counts nuclear warheads and armored vehicles for police fighting urban riots. They include Whitman's rifle, Speck's knife, and TV shows that glorify violence to sell toys to children.
But gross national product cannot deliver on children's health, the quality of their education, and the joy of play. It does not include the beauty of our poetry, the strength of our marriages, the intelligence of our public debates, or the integrity of our public servants.
You can listen to the speech here.
To measure GDP, statisticians use three approaches. Measures the total value of goods and services produced. It is the total amount spent in the economy and the total amount of income received from profits and wages.
In theory, all three methods should yield the same numbers.
The Bank of England believes Britain's recession is over.
Yesterday, the BoE announced that UK GDP is expected to grow by 0.4% in the first quarter of this year, explaining:
UK GDP growth has accelerated since the start of the year, reversing a drop in output that was estimated to occur in the second half of 2023.
of [Monetary Policy] The Committee expected that the recovery in production would be supported by a recovery in household consumption supported by increases in real incomes.
Introduction: UK GDP report shows whether the economy is out of recession
good morning. We are about to find out whether the UK economy has emerged from recession.
New gross domestic product (GDP) statistics for the first three months of the year will be released at 7 a.m., with city economists hopeful of an economic expansion in the quarter.
If so, it would mean the shallow recession that began late last year is over.
In Citi terminology, a technical recession is when GDP declines in two or more consecutive quarters. As it stands (data is subject to frequent revisions…) the UK economy will contract by 0.1% in July-September 2023 and 0.3% in October-December due to weak consumer spending, which was declared earlier this year. caused a technological recession.
Analysts expect Britain's GDP to turn out to have increased by around 0.4% in the January-March period, which would put the recession in history.
The recent decline in inflation and expectations for interest rate cuts this summer are supporting the economy. According to previous data, GDP increased by 0.1% in February and 0.3% in January.
Deutsche Bank's Britain's chief economist sanjay rajasays:
The UK economy has likely avoided the short and marginal technical recession it found itself in last year. The economy is expected to recover after contracting by 0.3% from the previous quarter in the fourth quarter to 23rd quarter, expand by 0.4% from the previous quarter in the first to 24th quarter, and GDP in March is expected to increase by 0.1% from the previous month.
What is driving the recovery? That means there will be a positive payoff in the form of a recovery in household spending towards the start of the year. Government investment also likely supported GDP throughout the first quarter. We also believe that a certain amount of inventory build-up will also contribute to boosting GDP in the 1st-24th quarter. In other words, we expect a sustained return to growth trends from Q1 to Q1 2024.
Where are you going now? We expect GDP to expand by 0.5% in 2024. There is some upside risk to our forecast given the continued strength in business activity data.
agenda
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7am BST: UK GDP report for March and Q1 2024
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7am (BST): March UK Trade Report
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12:30pm BST: European Central Bank releases report of last monetary policy meeting
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3pm (BST): University of Michigan study on US consumer sentiment.