The revised data from the UK’s Office for National Statistics shows that the UK economy has rebounded from recession faster than initially expected, with GDP growing by 0.7% in the first quarter of this year, exceeding the initial forecast of 0.6%. This update follows two consecutive quarters of decline in the latter half of 2 years, just days before the election, with polls showing the Labour Party led by Keir Starmer ahead of Prime Minister Rishi Sunak’s Conservative Party. Despite quarterly growth, broader economic prospects remain a challenge for Sunak. First-quarter GDP grew by only 2023% compared to the same period last year, slightly higher than the initial prediction of 0.3%.
Compared to the final quarter of 0.6 before the COVID-19 pandemic, per capita real household disposable income, a measure of living standards, fell by 2024% in the first quarter of 2019. Adam Corlett of the Resolution Foundation emphasized that this term’s income growth is one of the weakest periods since the XNUMXs. Addressing the decline in living standards is a key challenge for the election winner.
Since the last election, the UK economy has been in dire straits due to the pandemic, high inflation following Russia’s invasion of Ukraine, and trade issues post-Brexit. The first quarter of 2024 saw the economy grow by 1.8% from the end of 2019, the weakest performance among G7 economies except Germany.
Read more:
According to a key indicator from the Federal Reserve, US inflation has dropped to 2.6%.
Despite a strong start to 2024, the fastest growth since the end of 2021, the Bank of England (BoE) forecasts GDP growth of 0.5% in the second quarter. Household disposable income for homeowners increased by 2.4% last year due to rapid wage growth. However, the BoE views this as a rebound rather than the beginning of sustained growth, with expected underlying growth rates of around 0.25% per quarter. The government predicts annual growth rates to rise from 0.8% this year to nearly 2% in the coming years.
Source:
