Great News: UK GDP Bounces Back from Recession
After a slow start in February, the UK’s economy kicked into high gear in March, sparking the official exit from recession.
What the Numbers Say
- Monthly GDP grew 0.4% in March, up from 0.2% in February.
- Quarterly growth for Q1 hit 0.6%, surpassing the 0.4% forecast.
- Services output surged 0.5% month‑on‑month; manufacturing added solid 0.2%.
- Construction slid 0.4% month‑on‑month, the only sluggish sector.
Why It Matters
When the government’s recession flag finally came down, it felt like a collective sigh of relief across the country.
“The 2023 recession is rapidly receding in the rearview mirror – ending almost as soon as it had started,” said Nicholas Hyett, Investment Manager at Wealth Club. He added that the UK is now in the black and growing faster than expected.
Bright Spots & Areas of Concern
Positives: The growth is broad‑based, with positive strides from retail to manufacturing.
Construction woes: The commercial construction market remains weak, largely because higher interest rates and ongoing pandemic aftershocks are still shaking the office and retail sectors. The shift to home working and online shopping is reshaping demand, a trend that’s not unique to the UK.
Bank of England’s Perspective
The central bank is likely to pause on cutting rates. With the economy looking solid, an early rate drop could be premature.
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