Britain’s escape from recession in the first three months of the year was stronger than initial figures suggested, official data has shown.
In its latest and first growth forecast, the Office for National Statistics (ONS) said that gross domestic product (GDP) grew by 0.7% between January and March.
He originally stated on May 10: Production increased by 0.6% This was a positive figure compared to the previous three months, bringing an end to the shallow recession that occurred in the second half of 2023.
At the time, economists widely blamed interest rate hikes by the Bank of England to combat inflation for squeezing demand.
All of the growth in the January-March period came from the services sector, which accounts for almost 80 percent of the economy.
Then we: Zero growth Construction sites and busy areas were hit hard by the severe weather recorded by the ONS in April.
The data is the last published by the ONS ahead of the July 4 vote, with the economy, and particularly personal finances, high on voter radar in the wake of the coronavirus pandemic and energy-related rising living costs.
The timing of the general election coincides with a fierce debate over whether banks should now cut interest rates to allow borrowing costs to ease.
At its last policy meeting about a week ago, the interest rate setting committee Voted 7-2 to keep bank rate at 5.25%.
Minutes from the meeting revealed continued concerns about the pace of wage growth in the services sector and persistent inflation.
Banks are concerned that raising interest rates at this stage risks pushing up inflation even faster at a time when basic salaries are rising at a 6% pace.
Percentage of Inflation is now back on target at 2% It’s been three years.
Despite this differential in favour of consumers, with wage growth outpacing inflation since June last year, living standards activists say the effects of the crisis since 2020 have taken a toll.
Real household disposable income was lower in early 2024 than it was in the second half of 2019, the Resolution Foundation said on Friday.
The report noted that despite growth of 2.4 percent over the past year, the current Congress’ growth rate so far has been slower than all but two Congresses since 1910.
The think tank said average per capita income has fallen by £120 a year since the last election.
Such figures are at the heart of the election campaign, but they also provide ammunition to critics of the Bank of England who argue that interest rates must be cut.
As things stand, financial markets and economists believe the first rate cut is likely to come in August or September, barring a new shock.
The bank last week projected the economy would expand 0.5% in the April-June period, despite reporting a slowdown in April itself.
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