Revisions to official statistics reveal that the UK economy grew more than expected in the first quarter of 2024, helping it to emerge from recession.
According to the Office for National Statistics (ONS), the economy experienced a 0.7% growth from January to March.
The growth projection was originally 0.6%, according to figures provided last month.
Due to slow development in recent years, the health of the economy has been a key issue in the general election campaign.
Since a rising GDP typically indicates more spending, more jobs, more tax revenue for the government, and higher pay increases for workers, it is the goal of most economists, lawmakers, and businesses to see GDP climb gradually.
According to the ONS, the original number for the first quarter of the year was better than economists had anticipated, with a boost from expansion in the services sector. This sector include industries like banking, hairdressing, and hotels.
More data was used to modify the growth of services upwards and the growth of manufacturing downwards.
The higher revision propelled the UK's economy to the position of fastest-growing among the G7 advanced nations in the first quarter of this year.
Rishi Sunak, the prime minister and leader of the Conservative Party, praised the updated growth and assured his family of a "clear plan to deliver a more secure future."
However, Labour claimed that the people were worse off as a result of what it called "14 years economic vandalism" by the Conservatives.
"A Labour government will grow the economy and show Britain is open for business with a plan for growth, so that we can put money back in people’s pockets," a representative said.
Treasury spokesperson for the Liberal Democrats Sarah Olney stated that the data would "come as cold comfort for families being hammered by spiralling mortgage repayments, unfair stealth taxes and the cost of a weekly food shop going through the roof" despite the upward revision.
Where am I in relation to GDP, and what does it mean?
Paul Dales, head of UK economics at Capital Economics, stated that "mainly due to upward revisions to consumer spending" was the reason for the greater growth rise in GDP in early 2024.
Expenditures on housing, food, and recreation and culture all went up in early 2024, according to the ONS, but workers' salary gains meant that household disposable incomes kept going up.
The result, according to Mr. Dales, was an increase in household saving rates from 10.2% at year's end to 11.1%—the highest rate since the COVID-19 savings boost in the middle of 2021.
In his words, "whoever is Prime Minister this time next week may benefit from the economic recovery being a bit stronger" according to the revised estimate.
According to Danni Hewson, head of financial research at AJ Bell, "it's the tiniest sliver of improvement but when it comes to UK GDP growth, every little really does help."
Party platforms have consistently prioritized expansion, regardless of disagreements over specific strategies for attaining that goal. Wealth is created, more money is poured into people's pockets, and the already-depleted coffers of the Treasury receive more tax revenue as the economy grows.
Although the UK economy has recovered from the recession it had in 2023's latter months, many families may still be struggling to make ends meet due to recent price increases.
People are paying more to borrow money for items like mortgages and loans because interest rates are at their highest for 16 years at 5.25%, although savers have also seen greater returns.
Recent economic data shows that April was a non-growing month due to a lack of spending and sluggish development caused by abnormally heavy rainfall.
The interest rate-setting Bank of England has hinted at a possible rate decrease in August, marking the first reduction in borrowing costs in almost four years.
The problem is that a lot of people have refinanced their mortgages at higher rates, and another three million households will have to pay more in the next two years since their fixed-rate terms are expiring.
Though "hotter-than-expected growth doesn't help those looking for a faster route to cutting interest rates, it does help to boost overall optimism," according to Sophie Lund-Yates, chief equities analyst at Hargreaves Lansdown, one can't help but be optimistic.
"The deep-seated productivity problems in the UK are overall a bigger concern than the immediate interest rate outlook," according to her.
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