The Office for National Statistics reports that the UK economy experienced slight growth for the second consecutive month in February.
Gross domestic product (GDP) expanded by 0.1% in February, following a 0.3% growth in January. This positive trend follows a 0.3% contraction in GDP between October and December last year, officially marking a technical recession. A recession is typically defined as two consecutive quarters of negative GDP.
The consecutive months of modest growth suggest that the economy may be emerging from recessionary territory.
Chancellor Jeremy Hunt responded to the latest figures, stating, "These figures are a positive indication that the economy is making progress, and we can capitalize on this momentum by staying committed to our plan." He highlighted recent cuts to National Insurance as part of the government's strategy to stimulate economic growth.
The production sector notably contributed to the overall growth, with output rising by 1.1% in February, compared to a 0.3% decline in January. However, the construction industry experienced a 1.9% decrease during the same period.
Liz Mckeown, ONS director of economic statistics, commented, "The economy exhibited slight growth in February, with manufacturing, particularly in the automotive sector, showing widespread growth. Services also saw some growth, particularly in public transport, haulage, and telecommunications. However, construction suffered notable declines due to adverse weather conditions affecting building projects."
Some analysts interpret these figures as a positive sign that the UK is likely to exit recession when March's data is released. Suren Thiru, economics director at the Institute of Chartered Accountants of England and Wales, stated, "February’s uptick in GDP suggests that the UK economy is gaining momentum from increased incomes and confidence resulting from declining inflation. It is highly probable that the UK exited recession in the first quarter, with further growth expected in March, especially with the boost from the earlier Easter holiday."
However, Thiru cautioned that long-term challenges remain, citing the potential impact of earlier interest rate hikes and ongoing supply chain constraints on the UK's growth prospects.
