The UK economy is showing positive signs of growth for the second month in a row, giving hope that it may escape recession. According to the Office for National Statistics (ONS), gross domestic product (GDP) increased by 0.1% in February. This growth follows the UK’s entry into a technical recession at the end of 2023 when two quarters of economic contraction were recorded.
In February, the production sector, which includes manufacturing, saw the fastest increase with a growth of 1.1%. The services sector also experienced a slight growth of 0.1%. The ONS also revised its January forecast upwards to 0.3% growth from the previously estimated 0.2%.
Liz McKeown, director of economic statistics at the ONS, highlighted that this is the first time since last summer that the UK economy has shown signs of growth. She noted that manufacturing, particularly in the car sector, contributed significantly to this growth. However, adverse weather conditions led to notable declines in the construction sector.
The recent cuts to National Insurance as part of the government’s plan to stimulate economic growth have been welcomed by Chancellor Jeremy Hunt. He emphasized that these positive figures show that his strategy is working and attributed them to his plan to reward work and boost economic growth.
As optimism grows over this trend, both businesses and government officials are hopeful that it will continue to offer stability and growth to the UK economy.
Despite recent challenges faced by many industries due to global supply chain disruptions and other factors, there is cautious optimism about recovery prospects for businesses across sectors.
The services industry has shown resilience amidst challenging market conditions with only modest decline in GDP compared with other sectors such as construction.
Overall, while not out of recession yet, these latest positive indicators suggest that recovery may be on track for many businesses across industries.
