• Sunday, May 26, 2024

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UK economy grows slightly in February, fuels recovery hopes

News of the emergence from recession would hand a major boost to embattled Prime Minister Rishi Sunak ahead of a general election this year

Picture for representation (iStock)

By: Shajil Kumar

Britain’s economy expanded by 0.1 per cent in February, fuelling modest recovery hopes after sinking into recession in the second half of last year, official data showed on Friday.

The gross domestic product uptick followed an upwardly-revised 0.3 per cent rise in January, after an initial reading of 0.2 per cent growth, the Office for National Statistics said in a statement.

Growth for the whole first quarter would signal the end of the UK’s recession.

“The economy grew slightly in February with widespread growth across manufacturing, particularly in the car sector,” said ONS director of economic statistics Liz McKeown.

“Services also grew a little with public transport and haulage, and telecommunications having strong months,” she added.

“Partially offsetting this there were notable falls across construction as the wet weather hampered many building projects.”

“These figures are a welcome sign that the economy is turning a corner,” finance minister Jeremy Hunt said in response to Friday’s data.

The UK economy shrank in both the third and fourth quarters of 2023, meeting the technical definition of a recession on the back of elevated inflation and high interest rates.

News of the emergence from recession would hand a major boost to embattled Prime Minister Rishi Sunak ahead of a general election this year.

His governing Conservatives are trailing far behind Keir Starmer’s main opposition Labour Party in opinion polls.

Business surveys suggest growth continued in March.

“While recession concerns are disappearing into the rear-view mirror, the longer-term outlook is still difficult, with the lagged impact of earlier interest rate hikes and chronic supply side constraints likely to continue limiting the UK’s growth potential,” Suren Thiru, Economics Director at ICAEW, an accountancy industry body, said. (Agencies)

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