Economy emerges from a technical recession

The U.K. economy has emerged from recession as gross domestic product rose 0.6% in the first quarter, official figures showed Friday, beating expectations.

Economists polled by Reuters had forecast growth of 0.4% on the previous three months of the year.

The U.K. entered a shallow recession in the second half of 2023, as persistent inflation continued to hurt the economy.

Although there is no official definition of a recession, two straight quarters of negative growth is widely considered a technical recession.

The U.K.’s production sector expanded by 0.8% in the period from January to March, while construction fell by 0.9%. On a monthly basis, the economy grew by 0.4% in March, following 0.2% expansion in February.

The Bank of England’s Monetary Policy Committee on Thursday warned that indicators of persistent inflation “remain elevated,” and voted to keep its main interest rate at 5.25%.

The central bank forecast headline inflation close to 2% in the near-term, but said it expects an increase slightly later in the year as the effects of a sharp fall in energy prices wear off.

This is a breaking news story and will be updated shortly.