UK Out of Recession with GDP Up Fastest in 2 Years

The Office for National Statistics has released figures confirming that the UK came out of recession with stronger that expected growth in the first 3 months of 2024.

UK GDP grew faster than the US and Europe although at +0.6% pa, this is still weak growth.

Prime Minister Rishi Sunak claimed the UK has “turned the corner”, but we would expect hi to say that given the impending general election.

Comment

Weak growth is perhaps what the Bank of England wants.  Stable and not in recession gives the Bank of England room to manoeuvre.  The Bank is not under pressure to cut rates early which it would have been if we have continued to be in recession after the 6 consecutive months of economic slowdown in 2023 but equally it is not overheating, so there is some breathing space before any cuts.

We expect rates to be cut in Autumn, but it could be slightly sooner if GDP holds in June/July and both the Federal Reserve and European Central Bank cuts rates.

Stability is our friend, and we welcome it for now.