By Ed Frankl
The U.K. economy grew slightly in the first quarter, upturning expectations a few months ago of a prolonged recession, though high inflation curbing purchasing power and Bank of England rate rises could put a lid on economic progress in the months to come.
Gross domestic product grew 0.1% from January to March compared with the previous three-month period, the same as in the fourth quarter of 2022, according to data from the Office for National Statistics released Friday.
Economists polled by The Wall Street Journal also expected a 0.1% expansion. The economy remains 0.5% smaller than its prepandemic level, according to the ONS.
Services and production output increased by 0.1% in the quarter, while construction output rose by 0.7%, the ONS said.
However, in March, the U.K. economy contracted 0.3% on month compared with no growth in February and an expansion of 0.5% in January, the ONS said.
The quarterly expansion, while small, is nevertheless better than many predicted in previous months. The Bank of England on Thursday upgraded its 2023 growth forecast to 0.25%, from a decline of 0.5% previously, and said there would be no contraction in any quarter, after underestimating the economy’s resilience in the face of higher food prices and as energy prices eased.
Write to Ed Frankl at email@example.com
Corrections & Amplifications
This story was corrected at 0646 GMT. The original incorrectly said the U.K. economy expanded 0.5 percent in February. It expanded in January.
This article was originally published by Marketwatch.com. Read the original article here.