The UK economy has rebounded from recession with faster-than-expected growth in the first quarter of 2024, according to official figures.
The National Statistical Office announced that it estimated that gross domestic product (GDP) increased by 0.6% from January to March.
This comes after a decline in the second quarter, indicating a technical recession in the second half of 2023.
A consensus of economists forecast a 0.4% improvement in the latest quarter.
Liz McKeown, ONS Director of Economic Statistics, said: “After two quarters of contraction, the UK economy returned to positive growth in the first three months of the year.
“There was broad strength across the service industries, including retail, transit, transportation and health.
“Automakers also had a good quarter. This was only slightly offset by another weak quarter in the construction sector.”
It recorded its strongest quarterly growth rate since the fourth quarter of 2021.
In particular, performance was driven by the service and production sectors growing by 0.7% and 0.8%, respectively.
On Friday, the ONS confirmed its quarterly results following economic growth of 0.4% in March, boosted by the UK's services industry.
There was notable growth in the human health and social services sector, administrative and support services, and wholesale and retail businesses.
However, while construction output declined during the month, the 0.4% decline marks a significant decline following a 2% decline in February.
Ben Jones, chief economist at the Confederation of British Industry (CBI), said the data showed the UK was “now well on its way to recovery”.
“The economy could maintain some momentum throughout the year as falling inflation improves households’ spending power and paves the way for interest rate cuts in the coming months,” he added.
“But the consumer-led recovery could be short-lived without more decisive action to tackle the long-standing problem of weak productivity growth that ultimately sets the pace limit for the UK’s economy.”
Meanwhile, George Dibb, director of the IPPR Center for Economic Justice, stressed that despite the GDP increase, “it is too early to say that the UK economy has turned a corner”.
“Today’s statistics are good news overall, with GDP growth exceeding expectations,” he said.
“But we're going to have to repeat the trick and get several quarters of growth like this to give many people the feeling that this is a sustained recovery.
“Data shows that although salaries are rising, real wages are rising for the first time in 20 years, rising house prices and weekly shop prices remain a concern for many households and we still have the second-lowest growth rate in the G7 in 2023. . .”
This comes a day after the Bank of England's Monetary Policy Committee left interest rates unchanged at 5.25% and slightly raised its economic growth forecast.
The latest monetary policy report said GDP would grow by 0.5% this year and 1% in 2025, both 0.25 percentage points higher than the estimates released in February.
Prime Minister Jeremy Hunt said: “There is no doubt that it has been a difficult few years. But today's growth figures are evidence that the economy is returning to full health for the first time since the pandemic.
“We are growing this year and have the best prospects of any G7 European country over the next six years, with wages growing faster than inflation.”
Labour's shadow chancellor, Rachel Reeves, said: “Now is not the time for Conservative ministers to take a victory lap and tell the British people they have never had it so good.
“The economy is still £300 smaller per head than it was when Rishi Sunak became chancellor.”