Economy emerges from a technical recession

The UK entered a mild recession in the second half of 2023, as persistent inflation continued to hurt the economy.

Although there is no official definition of a recession, two consecutive quarters of negative growth are widely considered a technical recession.

Britain’s manufacturing sector grew by 0.8% between January and March, while construction fell by 0.9%. On a monthly basis, the economy grew 0.4% in March, following a 0.2% expansion in February.

In terms of output, the services sector – crucial to the UK economy – grew for the first time since the first quarter of 2023, the Office for National Statistics said. The 0.7% growth is mainly driven by the transportation services sector which experienced its highest quarterly growth rate since 2020.

British Prime Minister Rishi Sunak, whose Conservative Party recently suffered significant losses in local elections, welcomed the news. “The economy has reached a milestone,” he said in a message published on the social network X.

“We know things are still difficult for many people, but the plan is working and we must stick to it,” Sunak added.

Suren Thiru, economic director of the ICAEW, a professional group of accountants, struck a more measured tone. He said the positive impact of lower inflation could be mitigated by renewed caution on spending amid political uncertainty ahead of a general election due later this year.

“The UK’s emergence from recession is a rather meaningless victory, as the overall picture remains one of an economy struggling with stagnation, low productivity and high economic inactivity limiting our growth potential” , said Thiru.

The Bank of England’s Monetary Policy Committee warned on Thursday that indicators of persistent inflation “remain elevated” and voted to keep its main interest rate at 5.25%.

The central bank forecasts headline inflation near 2% in the short term, but said it expects a slight increase later in the year as the effects of the sharp drop in energy prices will dissipate.

News Source :
Gn bussni

Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe. Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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