UK no longer in recession, official figures show
The UK economy is no longer in recession, according to official figures.
Gross domestic product (GDP) grew by a better-than-expected 0.6% between January and March, the Office for National Statistics (ONS) said.
Economists had predicted the figure would be 0.4%.
Prime Minister Rishi Sunak said it showed the economy had “turned a corner”, adding: “We know things are still tough for many people, but the plan is working, and we must stick to it.”
A recession, which is defined as two consecutive three-month periods where the economy contracts, was declared in February.
It came after the ONS said GDP, a major measure of economic growth, shrank 0.3% between October and December. It followed a contraction of 0.1% in the three months from July to September.
The slump was blamed on reduced consumer spending power amid high inflation and energy bills. Months of wet weather also contributed to keeping shoppers at home, commentators said.
The latest figures also revealed better-than-expected growth for March. GDP was up 0.4% during the month, which was higher than the 0.1% forecast by economists.
GDP growth figures for February were also revised upwards by the ONS, from 0.1% to 0.2%.
While previous recessions have been long-lasting – such as during the global financial crash of 2008 and 2009 – the latest one had been expected to be short-lived.
Recession over with a bang – but will voters forgive government?
Britain is not just out of recession. It is out of recession with a bang.
The economic growth we saw reported this morning by the Office for National Statistics is not just faster than most economists expected, it is the fastest growth we’ve seen since the tail-end of the pandemic when the UK was bouncing back from lockdown.
But, more than that, there are three other facts that the prime minister and chancellor will be gleeful about (and you can expect them to be talking about this number for a long time).
First, it’s not just that the economy is now growing again after two-quarters of contraction (that was the recession).
An economic growth rate of 0.6% is near enough to what economists used to call “trend growth”, back before the crisis – in other words, it’s the kind of number which signifies the economy growing at more or less “normal” rates.
And normality is precisely the thing the government wants us to believe we’ve returned to.
Second, that 0.6% means the UK is, alongside Canada, the fastest-growing economy in the G7 (we’ve yet to hear from Japan, but economists expect its economy to contract in the first quarter).
Third, it’s not just gross domestic product (GDP) that’s up. So too is gross domestic product per head – the number you get when you divide our national income by every person in the country.
Economy ‘returning to full health’
Chancellor Jeremy Hunt described the figures as “encouraging” and said it showed that the economy was “returning to full health”.
He told Sky News: “I think that for families who’ve been having a really tough time, this is an indication that difficult decisions that we’ve taken over recent years are beginning to pay off and we need to stick with them.
“We’re seeing that inflation is falling faster and I think people recognise it’s been a very, very challenging period, but they don’t vote for Conservative governments for us to do popular things.
“They trust us to do the right thing for the long-term benefit of the economy and that is what we’ve been doing.”
However, opposition parties said there was little cause for celebration.
Labour’s shadow chancellor Rachel Reeves said: “This is no time for Conservative ministers to be doing a victory lap and telling the British people that they have never had it so good.
“The economy is still £300 smaller per person than when Rishi Sunak became Prime Minister.”
Lib Dems Treasury spokesperson Sarah Olney MP said: “This Conservative Government crashed the economy and sent mortgages spiralling.
“If Rishi Sunak thinks hard-hit households will be celebrating today, he is even more out of touch than we thought.”
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Liz McKeown, the ONS’s director of economic statistics, said: “There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well.
“Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.
“In the month of March the economy grew robustly led, again, by services with wholesalers, the health sector and hospitality all doing well.”
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‘Path is downwards’ on interest rates
Ruth Gregory, from research firm Capital Economics, said the figures suggested the UK’s economic recovery would be stronger than previously anticipated.
She added: “All the early indicators suggest that GDP growth rose robustly in April as well.
“At the margin, this may mean the Bank of England doesn’t need to rush to cut interest rates. But the timing of the first interest rate cut will ultimately be determined by the next inflation and labour market releases.”
The latest figures come after the Bank of England held interest rates at 5.25% on Thursday and issued new forecasts for the UK economy.
The Bank projected that growth would be stronger this year, with unemployment and inflation rates lower than previously expected.
The government has signalled that plans to bring a second runway at Gatwick into regular use will get the green light if environmental conditions are met.
Transport Secretary Heidi Alexander said she was “minded to approve” the airport’s plans but the deadline for a decision had now been pushed back until the end of October.
The main stumbling blocks facing Gatwick’s proposals are related to its provisions for noise prevention and public transport.
The Planning Inspectorate had made recommendations in those two areas after initially rejecting the scheme.
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The airport welcomed the government’s statement but did not say whether it saw a need to adjust its plans to meet the conditions.
Gatwick has until April 24 to respond to the new proposals.
The northern runway already exists at the airport parallel to the main one, but cannot be used at the same time as it is too close.
It is currently limited to being a taxiway and only used for take-offs and landings if the main one has to shut.
Gatwick wants to move it 12 metres further away to solve this problem.
The northern runway is currently only used for emergencies or where the main one is closed. Pic: PA
It says being able to run both at the same time would allow around 100,000 more flights per year and create 14,000 jobs.
Gatwick says the £2.2bn project would not need government money, would be 100% privately funded, and could be complete by the end of the decade.
The airport is already the second busiest in the UK, and the busiest single runway airport in Europe.
Campaigners argue the additional traffic would be catastrophic for the environment and the local community in particular.
Today’s update comes after the chancellor said last month the government also supported a third runway at Heathrow as part of its wider effort to bolster UK economic growth.
However, the formal planning process is still to take place.
Gatwick’s additional runway would be unlikely to open until the end of the decade, assuming any legal challenges were swiftly overcome.
A government source told Sky News: “The transport secretary has set out a path to approving the expansion of Gatwick today following the Planning Inspectorate’s recommendation to refuse the original application.
“This is an important step forward and demonstrates that this government will stop at nothing to deliver economic growth and new infrastructure as part of our Plan for Change.
“Expansion will bring huge benefits for business and represents a victory for holidaymakers. We want to deliver this opportunity in line with our legal, environmental and climate obligations.
“We look forward to Gatwick’s response as they have indicated planes could take off from a new runway before the end of this Parliament.”
Stewart Wingate, Gatwick’s chief executive, said: “We welcome today’s announcement that the Secretary of State for Transport is minded to approve our Northern Runway plans and has outlined a clear pathway to full approval later in the year.
“It is vital that any planning conditions attached to the final approval enable us to make a decision to invest £2.2bn in this project and realise the full benefits of bringing the Northern Runway into routine use.
“We will of course engage fully in the extended process for a final decision.”
He added: “We stand ready to deliver this project which will create 14,000 jobs and generate £1bn a year in economic benefits. By increasing resilience and capacity we can support the UK’s position as a leader in global connectivity and deliver substantial trade and economic growth in the South East and more broadly.
“We have also outlined to government how we plan to grow responsibly to meet increasing passenger demand, while minimising noise and environmental impacts.”
A spokesperson for campaign group Communities Against Gatwick Noise Emissions (Cagne) responded: “We welcome the extension by the secretary of state until October as she has obviously recognised the many holes in the Gatwick airport submissions during the planning hearings.
“Cagne do not believe Gatwick has been totally up front with their submissions, and the planning hearings left so many questions unanswered.”
Greenpeace UK’s policy director, Doug Parr, said of the process ahead: “By approving Gatwick’s expansion the government will hang a millstone the size of a 747 around the country’s neck.
“Such a decision would be one that smacks of desperation, completely ignoring the solid evidence that increasing air travel won’t drive economic growth. The only thing it’s set to boost is air pollution, noise, and climate emissions.”
Nvidia has signalled no drop in demand for its flagship chips among big artificial intelligence (AI) spenders despite the low-cost challenge posed by Chinese rival DeepSeek.
The leading AI chipmaker said it expected Blackwell sales to continue to grow after its latest earnings beat market expectations.
Nvidia forecast revenue of around $43bn (£34bn) for its first quarter after achieving a figure of $39.3bn (£31bn) over its last three months – up 12% from the previous quarter and 78% from one year ago.
Just a month ago, its shares took a hammering when it emerged DeepSeek‘s primary chatbot, which uses lower-cost chips, had become the most popular free application on Apple’s App Store across the US.
Nvidia’s shares lost almost $600bn in market value in a day.
It also prompted investors to question whether the AI-led stock market rally of recent years was overblown.
There was anxiety ahead of Nvidia’s earnings report though shares only fell fractionally in after-hours dealing.
Market analysts suggested demand from Microsoft, Amazon and other heavyweight tech companies racing to build
AI infrastructure remained robust, given Nvidia’s revenue guidance even though the bulk of it is accounted for through data centres.
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Nvidia founder Jensen Huang said Nvidia has ramped up the massive-scale production of Blackwell and achieved “billions of dollars in sales in its first quarter”.
“Demand for Blackwell is amazing as reasoning AI adds another scaling law – increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter.
“AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionise the largest industries,” he said.
Derren Nathan, head of equity research at Hargreaves Lansdown, said of the report: “The longer-term investment case for the driver of the AI train is looking difficult to pick holes in, with Meta’s $200bn just one of the latest mega investments in data centres to be unveiled recently.
“By virtue of scale, growth may be slowing a little but upgrades to analysts full-year numbers can be expected off the back of today’s results. At a around 30x forward earnings, the valuation still doesn’t look overcooked.”
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