UK economy exits recession as interest rates held

10 May 2024

The UK economy grew by 0.6% between January and March, according to figures from the Office for National Statistics (ONS).

It means that the country has officially emerged from recession with growth led by the services sector.

Production also grew while the construction sector shrank.

It follows the Bank of England's decision to hold interest rates at 5.25% for the sixth month in a row.

The Bank signalled that rate cuts should follow later this year.

Ben Jones, Lead Economist at the Confederation of British Industry, said: 'Back-to-back increases in output over the first months of this year suggest the UK is now on the road to recovery. With falling inflation boosting households' spending power, as well as opening the way for a reduction in interest rates in the months ahead, the economy should be able to sustain some momentum through the year.

'But a consumer-led recovery could prove short-lived without more determined action to tackle the long-standing problem of weak productivity growth, which ultimately sets the UK's economic speed limit. 

'Firms want to see action that could help support investment and cut costs which, includes extending full expensing to leased and rented assets, and a business tax roadmap to give firms the certainty and confidence they need to plan ahead and invest in a vibrant UK economy.'

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