UK economy grows slightly for second straight month, with hopes country is exiting recession

12 April 2024, 07:08 | Updated: 12 April 2024, 07:30

The UK economy grew for a second straight month in February
The UK economy grew for a second straight month in February. Picture: Alamy

By Kit Heren

The British economy has grown slightly for the second month in a row, according to the Office for National Statistics.

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Gross domestic product (GDP) grew 0.1% in February, the ONS said.

That comes after GDP rose by 0.3% in January.

The UK economy shrank 0.3% between October and December last year, officially falling into a technical recession. GDP measures the value of goods and services produced.

A recession is defined as two consecutive quarters of negative gross domestic product (GDP).

The two months of slight growth suggest that the economy may be coming out of recession.

Read more: UK slips into recession after economy shrank 0.3% in final months of 2023, with country 'stuck in low-growth trap’

Read more: UK economy returns to growth after GDP rose 0.2% in January - raising hopes country is on its way out of recession

Jeremy Hunt welcomed Friday's figures
Jeremy Hunt welcomed Friday's figures. Picture: Alamy

Chancellor Jeremy Hunt said in response to Friday's figures: "These figures are a welcome sign that the economy is turning a corner, and we can build on this progress if we stick to our plan.

"Last week our cuts to National Insurance for 29 million working people came into effect across Britain, as part of our plan to reward work and grow the economy."

The production side of the economy was strong, contributing the most to the UK's overall growth as output from the sector rose 1.1% in February, compared to a 0.3% fall in January.

But output from the construction industry fell by 1.9% over the same period.

Liz Mckeown, ONS director of economic statistics, said""The economy grew slightly in February with widespread growth across manufacturing, particularly in the car sector,"

"Services also grew a little with public transport and haulage, and telecommunications having strong months.

"Partially offsetting this there were notable falls across construction as the wet weather hampered many building projects."

Some onlookers saw Tuesday's figures as a sign that the UK was likely to exit recession when March's figures are published.

Suren Thiru, economics director at the Institute of Chartered Accountants of England and Wales, said: "February’s uptick in GDP suggests that the UK economy is gaining some momentum from the boost to people’s incomes and confidence from falling inflation.

"It’s a racing certainty that the UK exited recession in the first quarter with output likely to have picked up further in March, particularly with the earlier Easter holiday lifting activity in key sectors, including retail."

But he added that "the longer-term outlook is still difficult, with the lagged impact of earlier interest rate hikes and chronic supply side constraints likely to continue limiting the UK’s growth potential."

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