“Outlook stabilises as UK economy is officially out of recession” says Yael Selfin, Chief Economist at KPMG UK.
“The UK economy grew by 0.6% in the first quarter of 2024, emerging from the shallow technical recession it entered in the second half of 2023. We expect to see continued growth for the rest of this year, supported by a more favourable economic backdrop. Falling inflation and real pay increases should help repair some of the damage to household incomes and support households’ consumption. Growth prospects have also improved in Europe, which could spur a recovery in exports.
“Despite the better near-term outlook, the improvement in GDP growth looks likely to be constrained by the ongoing weakness in productivity growth as well as reduced scope to increase employment levels. This could see annual GDP growth in the region of just 1% per year in the medium term.
“UK GDP grew by 0.4% in March, supported by a rise in services output which grew by 0.5%. Forward looking indicators point to further momentum in the coming months, consistent with our view that the worst is behind the UK economy.”
