Great Britain is nearing the end of recession
The British economy grew in February. Compared to the previous month, GDP increased by 0.1%.
Many experts expect interest rate cuts in Great Britain from the second half of the year.
Image: Dolka Akmen/EPA via Keystone
There are signs that the recession is coming to an end in Great Britain. In February, gross domestic product increased by 0.1% compared to the previous month, the ONS statistics office reported in London on Friday. It also rose 0.3% in January, bigger than the 0.2% initially reported. The British economy slipped into recession in the second half of last year, with gross domestic product contracting for two quarters in a row.
“These figures are a welcome sign that the economy is turning a corner,” said Finance Minister Jeremy Hunt. Prime Minister Rishi Sunak is banking on good economic figures ahead of this year's general election, and he is currently trailing the opposition Labor Party in opinion polls. Business surveys suggest growth continued in March. Despite the recovery, economic output is still below the level of June 2023, when the most recent decline began.
“While recessionary concerns are fading in the rearview mirror, the long-term outlook remains difficult,” said Suren Thiru of the ICAEW Association of Accountants. One reason for this is the high interest rate policy of the Bank of England which wants to fight inflation. The prime interest rate is currently 5.25%. This makes loans for investment more expensive. However, with inflation slowing, there are signs that interest rates will change. Many experts expect interest rate cuts from the second half of the year.
The dominant service sector grew by 0.1% in February compared to the previous month. Industrial production also increased by 1.2%. On the other hand, the construction sector registered a sharp decline of minus 1.9% in a year, according to statisticians.
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Reuters
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