UK: First quarter growth revised slightly upwards

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British growth in the first quarter was revised slightly upwards on Friday: the gross domestic product (GDP) of the United Kingdom increased by 0.7% between January and March, “an increase compared to an initial estimate of 0.6%”, announced the Office for National Statistics (ONS).

These data confirm that the country has emerged in the first quarter from the recession into which it fell at the end of 2023 and sees its economy recovering faster than expected, good news for Conservative Prime Minister Rishi Sunak a few days before elections that are looking bad for his party.

UK GDP had fallen by 0.3% in the fourth quarter of 2023, after falling by 0.1% in the third. However, two quarters of economic contraction in a row are generally considered by economists as the definition of a so-called “technical” recession.

The upward revision to first-quarter growth comes as a surprise as economists had generally expected the initial estimate to be maintained.

“Whoever is elected next week, they could benefit from a slightly stronger economic recovery than we had forecast,” commented Paul Dales, an analyst at Capital Economics.

However, GDP stagnated in April – in line with forecasts – due to unusually wet weather that penalised the construction and retail sectors, the ONS had announced in early June.

The Flash PMI index published last week by S&P Global, a leading indicator of growth, showed that private sector activity had slowed in June in the United Kingdom, reflecting in particular the uncertainties in the business world in the run-up to the general elections on July 4.

This article is originally published on rtl.be

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