Britain's economy exits recession ahead of elections

Britain saw stronger than expected growth in first quarter, as it exited recession in the first quarter of 2024. This comes as the country heads to elections this year.

The gross domestic product (GDP) expanded by 0.6%, more than the 0.4% market projection in the first three months of this year, said the Office for National Statistics (ONS).

During the last two quarters of 2023, the UK economy had seen stubborn inflation and a rise in the cost of living. 

GDP had shrunk by 0.3% in the fourth quarter of 2023. It had contracted by 0.1% in the third quarter of the same year.

Is the UK economy turning around?

Prime Minister Rishi Sunak said the economy had "turned a corner." He has made economic growth one of his top priorities, as his Conservative Party trails far behind the opposition Labour Party in polls.

"There is no doubt it has been a difficult few years, but today's growth figures are proof that the economy is returning to full health for the first time since the pandemic," said Chancellor of the Exchequer, or finance minister, Jeremy Hunt.

"We're growing this year and have the best outlook among European G7 countries over the next six years."

However, Labour's shadow finance minister Rachel Reeves slammed Conservative's stewardship of the economy, underlining the impact of the cost-of-living crunch.

"This is no time for Conservative ministers to be doing a victory lap and telling the British people that they have never had it so good," said the Labour Party's Rachel Reeves.

Britain's post-pandemic recovery has been slow. At the end of the first quarter of 2024, the country's economy had grown by 1.7% than its level in late 2019, with only Germany among the G7 faring worse.

On Thursday, the Bank of England kept its main interest rate at a 16-year high but said it may consider a cut in the coming months. 

tg/ (AFP, Reuters)