UK economy exits recession with fastest growth in two years

Business leaders today urged government to use the UK’s faster-than-expected economic growth as a building block to drive prosperity.

Figures released by the Office for National Statistics this morning revealed gross domestic product expanded by 0.6 per cent in the three months to March, bringing to an end the shallow recession the country entered into last year.  

It is the strongest period of economic growth since the fourth quarter of 2021 when it grew by 1.5 per cent.

Raj Kandola (pictured), director of external affairs at Greater Birmingham Chambers of Commerce, said: “Policymakers in the Treasury will be delighted as this morning's GDP figures revealed that the economy grew faster than expected.

“Locally, our Quarterly Business Report data reflects broader national trends, with domestic activity continuing its upward trend over the last three months - however despite the fall in inflation, underlying cost pressures continue to bite for many businesses.

“Now that the UK's shallow recession is technically over, the Government must use today's results as a building block to drive further growth and prosperity - fostering closer ties with overseas trade markets, tackling labour market shortages and encouraging more firm led investment would be a sensible start."

Meanwhile, the Bank of England announced yesterday that interest rates remain on hold at 5.25 per cent – but hinted they could be coming down as soon as next month.

Cameron Uppal, policy and public affairs advisor at the GBCC, said: “Many will be disappointed to hear the Bank of England's decision hold interest rates at 5.25 per cent.

“That said, inflation - currently at 3.2 per cent - is expected to have fallen closer to the Bank's 2 per cent target in April following the reduction in the energy price cap. It is hoped that this may contribute to rates being reduced as soon as June.

"Intelligence from businesses across the country will also play an important role in informing the Bank's future decisions.

“With this in mind, we have convened a group of Chamber members to meet with Sarah Breeden, member of the Bank of England’s Monetary Policy Committee and the Deputy Governor for Financial Stability today to share their views on consumer confidence, labour market pressures and rising costs. Insights from the Chamber's Quarterly Business Reports are also regularly shared with the Bank to ensure our members' views are heard."

Read the Chamber's latest Quarterly Business Report for an up-to-date snapshot of the performance of the Greater Birmingham Business Community.