It is too soon to say the UK economy is in the clear despite GDP growth. That’s the thinking of Jeremy Batstone-Carr, European Strategist at Raymond James Investment Services, in response to today’s news from the ONS which revealed that UK GDP grew by 0.2% in April 2023, following a fall of 0.3% in March 2023.
As Batstone-Carr comments: “Today’s GDP growth of 0.2% proves that the UK economy opened the latest quarter more strongly than the previous quarter, boosting the possibility that economic activity will be resilient enough to help the UK sidestep a recession. However, it is far too soon to call the ‘all clear’, particularly with the Bank of England poised to remain on its rate-hiking mission to suppress inflation that remains too high for comfort.”
“Following March’s dip in economic activity fuelled by industrial action, April saw fewer days lost to strikes and was accompanied by the retail sector springing back to action. Manufacturing and industrial production remain resilient after a solid first quarter, supported by a positive trend in vehicle production, gas output and mining activity.”
“While the UK economy is proving rather more resilient than its Euro Area counterpart, there remain grounds for continued caution. Consumer spending continues to be smothered by relentless inflation and households are under growing pressure from rising mortgage rates. Given these ongoing squeezes, a Herculean effort will still be required to avoid a recession.”
