UK no longer in recession, official figures show, as ‘confident’ Sunak insists economy has ‘real momentum’

Published

1 week ago

May 10, 2024

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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”.

He told Sky News’s Ed Conway: “I am pleased that while there’s more work to do, today’s figures show that the economy now has real momentum, and I’m confident that with time, people will start to feel the benefits of that.

“We’ve had multiple months now where wages are rising, energy bills have fallen, mortgage rates are down and taxes are being cut… I’m pleased with the progress that we’re making.”

Mr Sunak added: “I am confident the economy is getting healthier every week.”

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?

Ed Conway

Economics and data editor

@EdConwaySky

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.

Read the full analysis here

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.”

Sarah Olney MP, Treasury spokesperson for the Liberal Democrats, added: “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.”

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.”

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.

Politics

Rishi Sunak apologises to infected blood scandal victims and says it is ‘day of shame for British state’

Published

51 mins ago

May 20, 2024

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Rishi Sunak apologises to infected blood scandal victims and says it is 'day of shame for British state'

Prime Minister Rishi Sunak has offered a “wholehearted and unequivocal” apology to the victims of the infected blood scandal, saying it was a “day of shame for the British state”.

Mr Sunak said the findings of the Infected Blood Inquiry’s final report should “shake our nation to its core”, as he promised to pay “comprehensive compensation to those infected and those affected”, adding: “Whatever it costs to deliver this scheme, we will pay it.”

The report from the inquiry’s chair Sir Brian Langstaff blamed “successive governments, the NHS, and blood services” for failures that led to 30,000 people being “knowingly” infected with either HIV or Hepatitis C through blood products. Around 3,000 people have now died.

The prime minister said for any government apology to be “meaningful”, it had to be “accompanied by action”.

Politics live: Thatcher’s health secretary ‘disparaging’ to infected blood victims

Speaking in the Commons, Mr Sunak called it a “calamity”, saying the report showed a “decades-long moral failure at the heart of our national life”, as he condemned the actions of the NHS, civil service and ministers – “institutions in which we place our trust failed in the most harrowing and devastating way”.

The prime minister said they “failed this country”, adding: “Time and again, people in positions of power and trust had the chance to stop the transmission of those infections. Time and again, they failed to do so.

“I want to make a whole-hearted and unequivocal apology for this terrible injustice.”

Pointing to key findings in the report – from the destruction of documents through to failures over screening – Mr Sunak said there had been “layer upon layer of hurt endured across decades”.

He also apologised for the “institutional refusal to face up to these failings and worse, to deny and even attempt to cover them up”, adding: “This is an apology from the state to every single person impacted by this scandal.

“It did not have to be this way. It should never have been this way. And on behalf of this and every government stretching back to the 1970s, I am truly sorry.”

Labour leader Sir Keir Starmer also apologised for his party’s part in the scandal, telling the Commons: “I want to acknowledge to every single person who has suffered that in addition to all of the other failings, politics itself failed you.

“That failure applies to all parties, including my own. There is only one word, sorry.”

In his report, released earlier on Monday, Sir Brian issued 12 recommendations – including an immediate compensation scheme and ensuring anyone who received a blood transfusion before 1996 was urgently tested for Hepatitis C.

He also called for compensation – something Mr Sunak said would come and would be outlined in the Commons on Tuesday.

But speaking to Sky News’ Sarah-Jane Mee, he warned the “disaster” of the scandal still wasn’t over, saying: “More than 3,000 have died, and deaths keep on happening week after week.

“I’d like people to take away the fact that this is not just something which happened. It is happening.”

Sir Brian said what had happened to the victims was “no accident”, adding: “People put their trust in the doctors and the government to keep them safe. That trust was betrayed.

“And then the government compounded the agony by repeatedly saying that no wrong had been done.”

But he hoped the report would ensure “these mistakes are not repeated”.

He told Sky News: “We don’t want another 30,000 people to go into hospital and come out with infections which were avoidable, which are life-shattering, which were no accident.

“And we don’t want the government to end up being defensive about them – but instead to be candid [and] forthcoming in the ways which I’ve just suggested.”

Politics

All sides aligned in non-political day for apology to infected blood victims

Published

1 hour ago

May 20, 2024

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All sides aligned in non-political day for apology to infected blood victims

After decades of denial, gaslighting and a chilling cover-up of the plight that befell thousands of victims of the infected blood scandal, finally an apology that sought to begin to make amends on this “day of shame” for the British state.

“I want to speak directly to victims and their families,” said Rishi Sunak. “I want to make a whole-hearted and unequivocal apology for this terrible injustice.

“I am truly sorry.”

It was an apology on behalf of every government stretching back to the 1970s.

Politics live: Thatcher’s health secretary ‘disparaging’ to victims

He also made “two solemn promises” at the dispatch box – comprehensive compensation will be paid and the report will be acted on.

“We must fundamentally rebalance the system so we finally address this pattern so familiar from other inquiries like Hillsborough, where innocent victims have to fight for decades just to be believed,” said the prime minister.

This was the absolute right response. The infected bloods scandal is one of the most horrifying failures of the state to its citizens as, to quote Sir Brian Langstaff, people were “failed, not once but repeatedly, by their doctors, by the bodies [the NHS and others] responsible for the safety of their treatment, and by their governments”.

There has been untold suffering caused by the very people and institutions that are meant to treat you. That in itself is unconscionable, that it was then covered up in a “subtle, pervasive and chilling way” by the NHS and government – two institutions that should be in the service of citizens – is devastating.

Labour leader Sir Keir Starmer, looking up to address families in the Commons’ gallery, spoke to this betrayal as he told them: “Politics itself has failed you.

“That failure applies to all parties, including my own. There is only one word. Sorry.”

This was, for once, a very unpolitical day. All sides aligned, the apology fulsome and heartfelt, and agreement that whoever wins the next general election, compensation will be paid.

And, echoing the prime minister, Sir Keir added: “Lessons must be learnt to make sure nothing like this happens again. We must restore the sense that this is a country that can rectify injustice, particularly when carried out by institutions of the state.”

This is a scandal, an injustice, a cover-up that spanned decades, affected 30,000 victims and wreaked devastation on their lives and families.

Monday was the beginning of the end of a fight for justice that has been long fought and hard won. Politicians now must pay the compensation and bring in the reforms.

This scandal was one in which trust between citizens and the state wasn’t just badly broken, it was destroyed.

Today’s report, apology and promise of reparations is perhaps the beginning of trying to both right the wrongs endured by the blood scandal victims, and to begin to address the crisis of trust in government from an electorate that seems to have lost faith in the political class.