ब्रिटेन की अर्थव्यवस्था मंदी से बाहर निकली, पहली तिमाही में जोरदार वापसी हुई

ब्रिटेन की अर्थव्यवस्था मंदी से बाहर निकली, पहली तिमाही में जोरदार वापसी हुई

UK Economy Exits Recession, Rebounds Strongly in Q1

UK economy emerges from recession, posting robust rebound in Q1 with encouraging growth, signaling positive recovery prospects ahead.

  • Global News
  • 117
  • 11, May, 2024
Jivika Chawla
Jivika Chawla
  • @JivikaChawla

UK Economy Exits Recession, Rebounds Strongly in Q1

In a notable turnaround, the British economy demonstrated robust growth during the first quarter of the year, marking a significant departure from the previous trend characterized by economic contraction. Official figures released on Friday by the Office for National Statistics (ONS) indicated a 0.6% expansion in the economy compared to the preceding three-month period. This growth surpassed economists' expectations of 0.4%, signaling a stronger-than-anticipated resurgence.

Particularly encouraging was the broad-based strength observed across the crucial services sector, which played a pivotal role in driving the overall economic upturn. The magnitude of this increase was the most substantial since the final quarter of 2021, a period marked by the economy's recovery from the severe impact of the coronavirus pandemic.

The recent positive performance comes on the heels of two consecutive quarters of modest declines, a sequence that technically qualifies as a recession within the UK's economic framework. Despite this period of contraction, the British economy's overall growth over the past year has been tepid, largely hindered by persistently high interest rates, reaching levels not seen in 16 years at 5.25%.

However, there are indications that the trajectory of interest rates might be shifting. Bank of England Governor Andrew Bailey hinted at the possibility of a rate cut in June should inflation continue its downward trend. The Bank, along with counterparts like the U.S. Federal Reserve, had aggressively raised interest rates in late 2021 in response to inflationary pressures exacerbated by supply chain disruptions and geopolitical tensions, such as Russia's invasion of Ukraine.

While high interest rates have been effective in curbing inflation, they have simultaneously acted as a drag on economic activity in the UK. Economists are cautiously optimistic about the potential for sustained growth, buoyed by expectations of easing inflation and lower interest rates. However, projections remain tempered, with the Bank of England forecasting a modest 0.5% growth for the year, suggesting a cautious approach to expectations for the economic rebound.

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Jivika Chawla

Jivika Chawla

  • @JivikaChawla