UK economy grew more than expected at 0.7%

The Office for National Statistics (ONS) revealed the economy has grown by more than initially thought in the first three months of 2024.

Acting as a central battleground in the upcoming General Election, the strength of the UK economy has been found to have grown by more than expected. The figures from the ONS, which were released this morning, show between January and March the economy grew by 0.7%.

The news has been welcomed with open arms as figures released last monthly initially projected it would grow by 0.6%. In addition, a larger economy means extra jobs are created, more tax is paid to the government and workers get better pay rises.

Economists have theorised the growth has happened as a result of higher consumer spending which includes sectors such as hairdressing, banks and hospitality. However, while service growth was revised upwards, increases in manufacturing were revised down on the back of more data being collected.

Danni Hewson, head of financial analysis at AJ Bell, said: ‘It’s the tiniest sliver of improvement but when it comes to UK GDP growth, every little really does help.

‘Growth has been front and centre of party manifestos, even if they differ on the details of how that growth can be achieved. A growing economy creates wealth, puts more money in people’s pockets and ups the amount of tax delivered to the Treasury depleted coffers.’

Nevertheless, while the UK seems to be entering out of a recession, many households aren’t feeling any better off. Earlier this month, the Bank of England made the decision to keep interest rates at 5.25% – the highest they have been for 16 years.

The latest figures on the economy show it failed to grow in April after a particularly wet start to Spring.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, has claimed that whilst it seems positive the economy is growing the ‘deep-seated productivity problems in the UK are overall a bigger concern than the immediate interest rate outlook’.

Image: Andre Taissin

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