UK economy returns to growth
Newsflash: Britain’s short and shallow recession is over.
The UK economy grew by 0.6% in the first quarter of this year, according to a report from the Office for National Statistics.
This is a stronger growth than expected.
The ONS said the recovery was driven by the services sector and industry.
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In terms of output, services rose 0.7% quarter-over-quarter, with broad-based growth across sectors. In other regions, the production sector increased by 0.8%, while the construction sector decreased by 0.9%.
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On the spending side, increases in net trade, household spending, and government spending were partially offset by a decline in gross capital formation.
GDP increased by 0.6% in the first quarter of 2024 (January-March) after two consecutive quarters of decline.
• Services grew 0.7%
• Production increased by 0.8%
• Construction industry decreased by 0.9%
Read more ➡️ https://t.co/Ipaai6WSar pic.twitter.com/cyUCnuj6aM
— Office for National Statistics (ONS) (@ONS) May 10, 2024
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This rise in GDP means the economy is no longer in a technical recession after economic activity fell in the third and fourth quarters of last year.
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Compared to recent figures, we last saw growth this strong in the last quarter of 2021, McKeown explains.
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McKeown pointed to the pick-up in service sector growth, but also pointed out that construction shrank – due to a decline in new work.
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McKeown says:
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“After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year.
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“There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well. Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.
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“In the month of March the economy grew robustly led, again, by services with wholesalers, the health sector and hospitality all doing well.”
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Growth in March alone was also stronger than expected.
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GDP rose by 0.4% in March, the ONS reports, beating City forecasts for 0.1% growth.
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The services sector had a good month, growing by 0.5% in March, while production output grew by 0.2%. Construction output fell by 0.4% in the month, though.
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February’s GDP data has been revised higher too, to show growth of 0.2% (up from 0.1% first estimated).
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showing UK GDP up to March”,”credit”:”Photo: ONS”}}],”attributes”:{“pinned”:false,” keyEvent”: true,”summary”:false},”blockCreatedOn”:1715321283000,”blockCreatedOnDisplay”:”02.08 EDT”,”blockLastUpdated”:1715321516000,”blockLastUpdatedDisplay”:”02.11 EDT”,”blockFirstPublished”:17153215160 00,”blockFirstPublishedDisplay “:” 02.11 EDT”,”blockFirstPublishedDisplayNoTimezone”:”02.11″,”title”:”UK grew 0.4% in March”,”contributors”:[],”primaryDateLine”:”Friday 10 May 2024 02.15 EDT”,”SecondaryDateLine”:”First published Friday 10 May 2024 01.36 EDT”},{“id”:”663db5788f080eca966ae974″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Newsflash: The UK’s short, shallow, recession is over.
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The UK economy grew by 0.6% in the first quarter of this year, the Office for National Statistics has reported.
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That’s stronger growth than expected.
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The ONS says the recovery was driven by the services sector, and industry:
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In output terms, services grew by 0.7% on the quarter with widespread growth across the sector; elsewhere the production sector grew by 0.8% while the construction sector fell by 0.9%.
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In expenditure terms, there were increases in the volume of net trade, household spending and government spending, partially offset by falls in gross capital formation.
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GDP grew 0.6% in Quarter 1 (Jan to Mar) 2024 after two quarters of declines.
• Services grew by 0.7%
• Production grew 0.8%
• Construction fell 0.9%Read more ➡️ https://t.co/Ipaai6WSar pic.twitter.com/cyUCnuj6aM
— Office for National Statistics (ONS) (@ONS) May 10, 2024
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This rise in GDP means that the economy is no longer in a technical recession, after activity fell in the third and fourth quarters of last year.
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GDP is the standard measure of economic activity, but it has its critics too.
“,”elementId”:”5b84aad6-5689-4b32-8563-f4831f5fa70d”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
It tracks what’s happening across the economy, but does not distinguish between harmful and beneficial activity.
“,”elementId”:”1fa728b7-5c21-4ce0-b6f7-f7b28570a678″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Back in 1968, US presidential candidate Bobby Kennedy issued a magisterial rebuke, saying GDP ‘measures everything except that which is worthwhile’.
“,”elementId”:”88b2e4b3-585c-4d83-827d-f9ba7c4ba52f”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”prefix”:”Related: “,”text”:”Bobby Kennedy on GDP: ‘measures everything except that which is worthwhile’”,”elementId”:”d2b7d1e3-a57d-4773-b678-a75c9b68037b”,”role”:”thumbnail”,”url”:”https://www.theguardian.com/news/datablog/2012/may/24/robert-kennedy-gdp”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Kennedy told the University of Kansas:
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It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.
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It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.
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Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.
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“,”elementId”:”e5bd1c52-0761-4ee5-98e9-5878235e9ed5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
You can hear the speech here.
“,”elementId”:”96055084-0135-479a-a605-e6d1b991b535″},{“_type”:”model.dotcomrendering.pageElements.VideoYoutubeBlockElement”,”source”:”YouTube”,”originalUrl”:”https://www.youtube.com/watch?v=77IdKFqXbUY”,”elementId”:”60450de7-874c-47b4-9fc3-d30e97db1f96″,”width”:640,”embedUrl”:”https://www.youtube-nocookie.com/embed/77IdKFqXbUY?wmode=opaque&feature=oembed”,”role”:”inline”,”url”:”https://www.youtube.com/watch?v=77IdKFqXbUY”,”height”:480,”sourceDomain”:”youtube-nocookie.com”,”title”:”Robert F. Kennedy challenges Gross Domestic Product”,”isThirdPartyTracking”:false}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1715319636000,”blockCreatedOnDisplay”:”01.40 EDT”,”blockLastUpdated”:1715319993000,”blockLastUpdatedDisplay”: “01.46 EDT”,”blockFirstPublished”:1715319993000,”blockFirstPublishedDisplay”:”01.46 EDT”,”blockFirstPublishedDisplayNoTimezone”:”01.46″,”title”:”GDP Problems”,”contributors”:[],”primaryDateLine”:”Friday 10 May 2024 02.15 EDT”,”SecondaryDateLine”:”First published date Friday 10 May 2024 01.36 EDT”},{“id”:”663dac498f080eca966ae92f”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Good morning. We’re about to discover if Britain’s economy has clambered out of recession.
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New gross domestic product (GDP) figures for the first three months of this year are released at 7am, and City economists are hopeful that the economy expanded in the quarter.
“,”elementId”:”03dd176c-77d3-40b9-84b4-bcde1c2e9d0c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
If so, that would mean that the shallow recession that began in the second half of last year has ended.
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A technical recession, in City jargon, is at least two quarterly falls in GDP in a row. As things stand (and data are often revised…) the UK economy shrank by 0.1% in July-September 2023, and then by 0.3% in October-December as consumer spending slumped, triggering the technical recession declared earlier this year.
“,”elementId”:”5c238323-9879-4fd4-b504-b50f443793be”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Analysts are expecting to learn that UK GDP rose by around 0.4% in the January to March quarter, which would consign the recession to history.
“,”elementId”:”6c38e23c-1bea-4249-b826-8be7e9041e8c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Recent falls in inflation, and hopes that interest rates will be cut this summer, are supporting the economy. Previous data has shown that GDP rose by 0.1% in February, and 0.3% in January.
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Deutsche Bank’s chief UK economist, Sanjay Raja, says:
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The UK economy likely shrugged off the short and marginal technical recession it fell into last year. After contracting by 0.3% q-o-q in Q4-23, we expect the economy to bounce back, expanding by 0.4% q-o-q in Q1-24 with March GDP rising by 0.1% m-o-m.
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What’s driving the recovery? In short, some positive payback with household spending bouncing back to start the year. Government investment too will have likely supported GDP through the first quarter. And we think some build up in inventories will have also helped push GDP higher in Q1-24. In short, we expect Q1-24 to signal a sustained recovery back to trend growth.
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Where to now? We expect 2024 GDP to expand by 0.5%. There are some upside risks to our projection, given the continued strength of business activity data.
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The agenda
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7am BST: UK GDP report for March, and the first quarter of 2024
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7am BST: UK trade report for March
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12.30pm BST: European Central Bank to release accounts of its last monetary policy meeting
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3pm BST: University of Michigan’s survey of US consumer sentiment
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important events
ONS: Broad service growth last quarter
Oz Director of Economic Statistics liz mccune told Radio 4’s Today program that the 0.6% growth recorded last quarter was stronger than people expected.
Compared to recent numbers, the last time we saw this much growth was in the last quarter of 2021. mccune I will explain.
mccune He pointed out that growth in the service sector was accelerating, but also pointed out that the construction industry had shrunk due to a decline in new construction.
mccune say:
“After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year.
“Retail, public transport and shipping, and the health industry all did well, and the services industry as a whole did well broadly. Automakers also had a strong quarter. These were driven by another weak quarter in construction. It was only slightly offset.
“The economy grew steadily in March, with wholesalers and services, the medical sector, and hospitality all doing well.”
The UK grew by 0.4% in March.
Monthly growth in March also exceeded expectations.
GDP rose by 0.4% marchThe ONS reported that this exceeded the city’s 0.1% growth forecast.
The services sector had a strong month, growing by 0.5% year-on-year. march, output increased by 0.2%. However, construction output decreased by 0.4% in the same month.
February’s GDP data has also been revised upwards to show growth of 0.2% (up from 0.1% originally expected).
UK economy returns to growth
Newsflash: Britain’s short and shallow recession is over.
The UK economy grew by 0.6% in the first quarter of this year, according to a report from the Office for National Statistics.
This is a stronger growth than expected.
The ONS said the recovery was driven by the services sector and industry.
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In terms of output, services rose 0.7% quarter-over-quarter, with broad-based growth across sectors. In other regions, the production sector increased by 0.8%, while the construction sector decreased by 0.9%.
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On the spending side, increases in net trade, household spending, and government spending were partially offset by a decline in gross capital formation.
GDP increased by 0.6% in the first quarter of 2024 (January-March) after two consecutive quarters of decline.
• Services grew 0.7%
• Production increased by 0.8%
• Construction industry decreased by 0.9%
Read more ➡️ https://t.co/Ipaai6WSar pic.twitter.com/cyUCnuj6aM
— Office for National Statistics (ONS) (@ONS) May 10, 2024
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This rise in GDP means the economy is no longer in a technical recession after economic activity fell in the third and fourth quarters of last year.
GDP problem
Although GDP is the standard measure of economic activity, it has its critics.
It tracks what’s happening across the economy, but it doesn’t differentiate between harmful and beneficial activities.
Back in 1968, US presidential candidates bobby kennedy He scolded the chief executive, saying that GDP “measures everything except what has value.”
kennedy He told the University of Kansas.
A special lock is installed on our door, and a prison is provided for those who break it. It counts the destruction of sequoias and the loss of natural wonders due to sprawl.
It counts napalm, it counts nuclear warheads and armored vehicles for police fighting urban riots. They include Whitman’s rifle, Speck’s knife, and TV shows that glorify violence to sell toys to children.
But gross national product cannot deliver on children’s health, the quality of their education, and the joy of play. It does not include the beauty of our poetry, the strength of our marriages, the intelligence of our public debates, or the integrity of our public servants.
you can listen to the speech here.
To measure GDP, statisticians use three approaches. Measures the total value of goods and services produced. It is the total amount spent in the economy and the total amount of income received from profits and wages.
In theory, all three methods should yield the same numbers.
The Bank of England believes Britain’s recession is over.
Yesterday, the BoE announced that UK GDP is expected to grow by 0.4% in the first quarter of this year, explaining:
UK GDP growth has accelerated since the start of the year, reversing a drop in output that was estimated to occur in the second half of 2023.
of [Monetary Policy] The Committee expected that the recovery in production would be supported by a recovery in household consumption supported by increases in real incomes.
Introduction: UK GDP report shows whether the economy is out of recession
good morning. We are about to find out whether the UK economy has emerged from recession.
New gross domestic product (GDP) statistics for the first three months of the year will be released at 7 a.m., with city economists hopeful of an economic expansion in the quarter.
If so, it would mean the shallow recession that began late last year is over.
In Citi terminology, a technical recession is when GDP declines in two or more consecutive quarters. As it stands (data is subject to frequent revisions…) the UK economy will contract by 0.1% in July-September 2023 and 0.3% in October-December due to weak consumer spending, which was declared earlier this year. caused a technological recession.
Analysts expect Britain’s GDP to turn out to have increased by around 0.4% in the January-March period, which would put the recession in history.
The economy is supported by a recent decline in inflation and expectations that interest rates will be cut this summer. According to previous data, GDP increased by 0.1% in February and 0.3% in January.
Deutsche Bank’s Britain’s chief economist sanjay rajasays:
The UK economy has likely avoided the short and marginal technical recession it found itself in last year. The economy is expected to recover after contracting by 0.3% from the previous quarter in the fourth quarter to 23rd quarter, expand by 0.4% from the previous quarter in the first to 24th quarter, and GDP in March is expected to increase by 0.1% from the previous month.
What is driving the recovery? That means there will be a positive payoff in the form of a recovery in household spending towards the start of the year. Government investment also likely supported GDP throughout the first quarter. We also believe that a certain amount of inventory build-up will also contribute to boosting GDP in the 1st-24th quarter. In other words, we expect to see signs of a sustained return to growth trends by Q1-1 of 2024.
Where are you going now? We expect GDP to expand by 0.5% in 2024. There are some upside risks to our forecast given the continued strength in business activity data.
agenda
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7am BST: UK GDP report for March and Q1 2024
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7am (BST): March UK Trade Report
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12:30pm BST: European Central Bank releases report of last monetary policy meeting
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3pm (BST): University of Michigan study on US consumer sentiment.
