Britain has emerged from recession faster than expected.

Revised figures released by the Office for National Statistics revealed that the UK economy emerged from recession faster than originally expected, with GDP growing by 0.7% in the first quarter of this year, beating the original estimate of 0.6%.

The update comes after two consecutive quarters of decline in the second half of the year and just days before an election in which opinion polls show Keir Starmer's Labor Party ahead of Prime Minister Rishi Sunak's Conservatives. Despite the quarterly growth, the broader economic outlook remains a challenge for Sunak. GDP in the first quarter was only 2023% higher than a year earlier, slightly higher than the initial estimate of 0.3%.

Household real disposable income, a measure of living standards, was 0.6% lower per capita in the first quarter of 2024 than in the last quarter of 2019, before the Covid pandemic. Adam Corlett of the Decision Foundation stressed that income growth this quarter was among the weakest since the 1950s. Addressing this decline in living standards constitutes a major challenge for election winners.

The United Kingdom's economy has been suffering since the last elections due to the pandemic, high inflation after the Russian invasion of Ukraine, and trade problems after Britain's exit from the European Union. In the first quarter of 2024, the economy was 1.8% stronger than at the end of 2019, the weakest development among the G7 economies, with the exception of Germany.

Despite a strong start to 2024, with the fastest growth since late 2021, the Bank of England (BoE) expects GDP to grow by 0.5% in the second quarter. Real disposable income per household member rose by 2.4% last year due to rapid wage growth. However, the Bank of England sees this as a recovery rather than the beginning of sustained growth, and estimates the underlying growth rate at around 0.25% per quarter. The government expects annual growth to rise from 0.8% this year to nearly 2% in the coming years.

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