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UK GDP is estimated to have risen by 0.1% in February and the determine for January has been revised up from 0.2% to 0.3% progress, elevating expectations that the UK will keep away from a protracted recession.
There was robust progress in manufacturing, significantly fuel and automotive manufacture.
Progress stays anaemic, nevertheless, in response to most consultants.
Companies output rose by 0.1% month-on-month with development output down 1.9% month-on-month. Manufacturing rose 1.1% month-on-month.
ONS, which produces the info, mentioned that the development trade was hit by moist climate.
The UK entered a shallow recession on the finish of 2023 however the financial system now seems to be rising, albeit at a gradual charge.
Danni Hewson, head of monetary evaluation at AJ Bell, mentioned the information was typically optimistic.
She mentioned: “Any progress is nice information and positively the UK appears to be trudging slowly out of final yr’s short-lived recession. However at 0.1% in February and even with the upwardly revised 0.3% in January, UK progress seems fairly pitiful once you examine it to the financial image on the opposite aspect of the pond.
“The impression of rain on GDP explains why we Brits are so pre-occupied with the climate. All these downpours dampened spirits and stored buyers tucked up of their properties. Development work slowed as soon as once more and the rain undoubtedly performed an element right here, however it wasn’t the entire story.”
Nicholas Hyett, funding analyst at HNW-focused funding dealer Wealth Membership mentioned: “Constructive UK GDP progress in February, coming along with an improve to the January estimate, will do nothing to reassure markets that rate of interest cuts are locked in for the primary half of this yr.
“Having mentioned that, areas of the financial system which might be depending on discretionary spending do look sort of soggy. Lodging and food and drinks companies each contracted in February and the development sector is within the doldrums (with eight out of 9 sectors seeing a lower month-on-month). There are ideas moist climate might have performed an element right here, however an rate of interest lower could possibly be fairly useful to these areas of the financial system nonetheless.”
Ed Monk, affiliate director at Constancy, mentioned: “It has to rely as excellent news that the financial system is returning to progress – the GDP estimate at the moment means the UK grew 0.4% throughout January and February. Final yr’s recession seems to have been each shallow and short-lived however the truth stays that UK progress stays weak. We could also be shaking off technical recession however that gained’t change the sensation that there’s little or no momentum within the financial system.
“If at the moment’s studying is optimistic for progress total it could find yourself being unhealthy information for each debtors and monetary markets, within the short-term not less than. Each are ready for the Financial institution of England to chop charges however wage rises and now higher efficiency in elements of the financial system are including to inflationary pressures. Expectations of charge cuts this yr have softened and markets now count on solely two cuts earlier than 2025. It appears you possibly can have a recovering financial system, or you possibly can have the reduction of decrease charges – however you possibly can’t have each on the similar time.”
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