UK Economy Bounces Back with 0.6% Growth in Q1, Despite Construction Output Slip

The UK economy has shown signs of recovery after growing by 0.6% in the first quarter of the year, according to the Office for National Statistics. This growth was stronger than the 0.4% improvement predicted by economists. The positive growth comes after two quarters of decline in the latter half of 2023, signifying a technical recession.

Despite the overall positive growth, construction output saw a slight decline during the quarter, but the decrease was less significant compared to the previous month. ONS director Liz McKeown noted that the positive growth was mainly driven by the strength in service industries, with good performances from retail, public transport, health, and car manufacturers. Labour’s shadow chancellor Rachel Reeves cautioned against celebrating too soon, reminding that the economy is still smaller than it was before Rishi Sunak became Prime Minister.

Chancellor Jeremy Hunt commented on the GDP figures, stating that the economy is starting to return to full health for the first time since the pandemic. He highlighted the UK’s strong growth prospects compared to other G7 countries and mentioned benefits such as rising wages, falling energy prices, and tax cuts for workers. The growth was driven by improvements in both services and production sectors, with notable contributions from sectors like human health, social services, and retail.