The UK economy grew between January and March, meaning that that the country has officially emerged from recession.

Gross domestic product (GDP) expanded by 0.6% in the first quarter of 2024, according to the Office for National Statistics, which was ahead of analyst estimates of 0.4%.

It means the UK is no longer in recession after two consecutive quarters of contraction at the end of 2023, when the economy shrank by 0.1% in the third quarter and 0.3% in the final three months of the year.

GDP grew by 0.4% in March, by an upwardly-revised 0.2% in February and by 0.3% in January.

It comes a day after the Governor of the Bank of England, Andrew Bailey, indicated that interest rates will need to be cut in the UK, possibly at a faster pace than markets anticipate.

Chancellor Jeremy Hunt said: “There is no doubt it has been a difficult few years, but today’s growth figures are proof that the economy is returning to full health for the first time since the pandemic.

“We’re growing this year and have the best outlook among European G7 countries over the next six years, with wages growing faster than inflation, energy prices falling and tax cuts worth £900 to the average worker hitting bank accounts.”

Labour's shadow chancellor Rachel Reeves said this is "no time for Conservative ministers to be doing a victory lap and telling the British people that they have never had it so good".

“After 14 years of economic chaos, working people are still worse off," she said.

"Prices are still significantly higher in the shops, families are paying hundreds of pounds more on monthly mortgage bills, and the economy is forecast to grow by just one per cent next year."

Business 'resilience'

Reacting to the latest GDP figures, David Bharier, Head of Research at the British Chambers of Commerce, said: “Today's Q1 GDP first estimate of 0.6%, outstripping expectations, is a welcome sign that the UK has moved away from last year’s shallow recession. Businesses across the UK have been the driving force behind the recovery.

“Firms have shown resilience in the face of multiple headwinds and this estimate should give business and investor confidence a boost.

“However, significant challenges remain. The UK has seen waves of economic and political uncertainty in recent years, from inflation to skills shortages and trade barriers with the EU, which have weighed down on its growth potential. Our latest surveys show that most SMEs are still not increasing investment.

“With signals from the Bank that their next move will be an interest rate cut, it is now essential that policymakers show businesses a clear plan for growth to unlock their economic potential.”

FTSE 100

The UK's flagship share index, the FTSE 100, was up 42-points at 8,423 shortly after opening this morning.

Brent crude oil futures were up 0.73%, trading at $84.49 a barrel.

Companies reporting today

International Consolidated Airlines Group

Q1 Results

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