The UK economy experienced a mix of challenges and positive developments in the first quarter of 2024. Here are the key points:
GDP Growth and Technical Recession:
Gross Domestic Product (GDP) is a crucial indicator of economic health. In Q1 2024, the UK’s real GDP rose by 0.2% month-on-month (m/m) in January, following a contraction of 0.1% in December.
The UK had faced a mild “technical recession” (two consecutive quarters of contracting output) in late 2023. However, business surveys suggest that the economy was on track to exit this recession in Q1 2024.
Sectoral Performance:
In output terms, all three main sectors experienced declines in Q1 2024:
Services: Decreased by 0.1%
Production: Declined by 1.1%
These sectoral challenges contributed to the overall economic performance during the quarter.
Expenditure Trends:
Household consumption, gross capital formation, and net trade volume declined in Q1 2024.
Government consumption increased, partially offsetting the negative impact.
Inflation and Income:
International Comparisons:
In comparison to other economies:
Eurozone GDP increased by 0.3% in Q1 2024, following two successive quarterly falls.
Conclusion
While the UK faced economic headwinds in certain sectors, the signs of recovery and the exit from the technical recession offer hope for sustained growth. Policymakers and businesses will closely monitor these trends as the year progresses.
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