Economic growth - UK

Revised government numbers indicate that when the UK emerged from a recession in the first three months of 2024, the economy increased more than first predicted.

The economy expanded by 0.7% between January and March, according to the Office for National Statistics (ONS).

Data from last month's report suggested growth had initially been 0.6%.

Given that growth has been slowing recently, the state of the economy has been a major focal point of the general election campaign.

A continually increasing GDP is desirable to most economists, legislators, and companies since it often indicates more consumer spending, the creation of new employment, increased tax revenue for the government, and increased worker pay increases.

According to the ONS, the first estimate for the first quarter of the year was higher than anticipated due to growth in the services sector, which includes companies like banks, hotels, and hair salons.

However, on the basis of further data being gathered, growth in manufacturing was revised downward while growth in services was updated higher.

In early 2024, household disposable incomes continued to climb as workers received salary increases, according to the ONS, despite higher expenditure on housing and food, as well as on recreation and culture.

To continue, even if the UK has exited the economic downturn that it experienced in the latter months of 2023, many people might not be in a better financial situation since growing prices have recently put pressure on their budgets.

At 5.25%, interest rates are at their highest point in 16 years, which means that borrowing costs for loans and mortgages are higher, even though savers have made greater returns.

According to the most recent data, the economy shrank in April as a result of exceptionally rainy weather that discouraged consumers and slowed down building.

The Bank of England, which determines interest rates, has hinted that it may lower them in August, marking the first decrease in borrowing costs in almost four years.

(Sources: bbc.co.uk)