The UK economy has managed to claw its way out of what economists like to call a “technical recession” and what everyone else calls “bad news,” delivering modest growth of 0.6 percent in the first quarter of 2024 according to the Office for National Statistics. It is the best quarterly performance since mid-2021, which is both impressive and a reminder of how long it has been since things looked vaguely chipper.
This tepid bounce follows two consecutive quarters of negative growth in the back half of 2023, which officially landed the country in a mild recession even if most Britons were too busy dodging rail strikes and triple-digit grocery bills to notice. The services sector, which accounts for around 80 percent of the UK economy and roughly 98 percent of all conversations in middle management, grew by 0.7 percent. Construction also miraculously rose by more than 1 percent, despite the usual British spring offerings of wind, drizzle and the general disapproval of planners.
Chancellor Jeremy Hunt, never one to let a modest win go undetected, declared this a “turning point.” He attributed the growth to recent government measures and strong productivity, though critics might note that productivity gains tend to be inversely proportional to time spent making such declarations. Still, Hunt expressed confidence that the UK was on the “path to healthy growth” which, much like spotting a unicorn on the M25, is theoretically possible but rarely witnessed firsthand.
Labour shadow chancellor Rachel Reeves was understandably less enthused, noting that people are still feeling the pinch and that “this is no time for a victory lap.” Although realistically, in current economic footwear, laps of any kind are inadvisable.
In the background, economists have been cautiously optimistic, which is academic speak for somewhere between “could be promising” and “awaiting further doom.” Inflation has been slowly retreating like a cat that has realised it was in the wrong room, and interest rates have stabilised at an eye-watering but no longer climbing level.
“The UK economy is bigger than it has ever been,” noted an ONS statistician, presumably while clutching a cup of tea that may or may not have brandy in it.
Ultimately, the country has emerged from recession, blinking in the weak spring sunshine and wondering if this counts as good news or simply not-quite-bad news, which is the closest Britain dares come to optimism these days.
The economy may be alive, but it is still not entirely sure why it came into the room.