Uk Economy To Register Modest Growth

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Uk Economy To Register Modest Growth

UK Economy To Register Modest Growth In 2024's Start

According to economists, the UK's economy managed to enter into growth territory in January 2024. If we look back, the UK's economy entered into a shallow recession during 2H2023.

However, the economic numbers coming from the UK during January are now showing some positive signs. With the elections up ahead later this year, it will be a source of relief for the UK government.

Uk Gdp Up By 0.2%

On a m/m basis, GDP increased by 0.2% on account of a rebound seen in the home building and retail sector. During December, the GDP shrank by 0.1%, which shows that the UK economy has managed to turn around for good.

According to ONS, strong growth was seen in the wholesale and retail sectors, which uplifted the economy. Another sector that performed well was construction, which showed subdued growth in 2023.

However, it will still be too soon to rejoice as we can't really announce that UK has gone out of recession based on one month data. After all, the Q4 2023 showed a decline of 0.3% in the GDP while the Q3 showed a 0.1% decline.

Ever since recovering from the pandemic, the UK's economy continues to show signs of struggle. This was made worse with the increased energy prices along with high interest rates from the BoE.

In January, the UK's inflation reading was 4%, which has gone down significantly from the double-digit values seen in 2023. Despite this, the inflation is still a little higher than the BoE's 2% target.

Despite the positive signs, the Pound Sterling continues to show weakness against the greenback and the EURO. Looking ahead, investors believe that the June will be the month of rate cut.

If we look at the GDP numbers from a year earlier in January, it shows that the reading was lower by 0.3%. So even from that angle, it doesn't look good for the UK economy.

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