Image source, Getty Images
- Author, Dearbail Jordan
- Role, Economic journalist
Prime Minister Rishi Sunak said it “will take time” for people to “really feel better” as figures reveal the UK has emerged from recession.
The economy grew 0.6% between January and March, following a slowdown in the second half of last year.
Mr Sunak told the BBC the UK economy had “real momentum” but admitted there was “still more work to do”.
Labor and the Liberal Democrats said there was little to celebrate. “After 14 years of economic chaos, the situation for workers is even worse,” said Labour’s shadow chancellor Rachel Reeves.
Gross domestic product (GDP) – which measures the amount of goods and services produced by an economy – grew more than expected in the first three months of the year. Analysts expected growth of 0.4%.
Mr Sunak suggested there was now some strength behind the UK economy, which grew at the fastest pace in two years between January and March.
The UK fell into recession at the end of last year, following two consecutive three-month periods.
Mr Sunak said: “Of course there is still work to do and I understand that and that is why I am keen to stick to our plan and continue to serve people.
“But I think today’s numbers show we now have momentum.”
However, Ms Reeves said: “Now is not the time for Tory ministers to take a victory lap and tell the British people they have never had it better.”
Lib Dem Treasury spokeswoman Sarah Olney said it was time to call a general election.
The economy will be a key battleground in the upcoming elections, the date of which has not yet been revealed.
Meanwhile, the FTSE 100 index closed at a new record high after the release of economic figures.
It closed up 52.41 points, or 0.63%, at 8,433.76, with financial and industrial stocks among the biggest risers of the day.
Earlier this week, Bank of England Governor Andrew Bailey told the BBC that the UK was experiencing a recovery, although it was not strong.
The Bank voted to maintain interest rates at 5.25%, their highest level in 16 years. She expects inflation – which measures the pace of price rises – to return to its 2% target in the coming months.
This lowered expectations for a rate cut next month. However, higher-than-expected GDP figures dampened those expectations.
Ruth Gregory, deputy chief economist at Capital Economics in the UK, said it showed that “the Bank of England does not need to rush to cut interest rates”.
She said the first rate cut would ultimately be determined by upcoming employment and inflation figures.
Mr Sunak said GDP figures show the UK has the highest growth rate among developed G7 countries, tied with Canada.
He added: “Wages are going up, energy bills are going down and taxes are going down. »
The government has cut national insurance by 4% since the end of last year.
However, he also kept the income tax thresholds frozen, so that when a person’s salary increases, they can move into a higher tax bracket.
News Source : www.bbc.com
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