On February 15, 2024, in London, England, contrails from planes crisscrossed the sky over Regent Street. The United Kingdom’s gross domestic product (GDP) increased by 0.1% in February, according to the Office for National Statistics, indicating a gradual return to economic growth for the year. This figure matched projections in a Reuters poll, while on an annual basis, GDP was 0.2% lower than expected.
In the third and fourth quarters of 2023, the U.K.’s economy contracted and resulted in a technical recession. However, January saw slight growth that was later revised to 0.3%. Construction output fell by 1.9% in February despite initially boosting growth earlier in the year. Production output was once again the main contributor to GDP growth and increased by 1.1% that month. Meanwhile, growth in the services sector slowed down from 0.3% to just 0.1%.
Paul Dales, chief U.K economist at Capital Economics believes that these recent GDP figures “all-but confirm” that the recession ended last year.” He expects a better economic recovery for Britain but doubts it will be strong enough to prevent inflation and interest rates from falling as observed in the U.S.. In March, British inflation unexpectedly dropped to a nearly two-and-a-half-year low of 3.4%, while in America higher-than-forecast price rises led to a postponement of interest rate cuts until September – this is breaking news and updates will follow shortly.
The contrails over Regent Street were one of many signs that things are starting to turn around for Britain’s economy after years of uncertainty caused by the COVID-19 pandemic and Brexit.
In conclusion, despite some slowdowns throughout the past year, it seems like Great Britain is finally making progress towards recovery thanks to its robust production output and resilient services sector while construction output still needs improvement before reaching its full potential.
