By David Milliken
LONDON (Reuters) – The United Kingdom's economy emerged from recession faster than previously thought in the first three months of the year, revised official data showed on Friday, but the economic outlook remains fragile ahead of next week's election.
The Office for National Statistics said Britain’s gross domestic product grew by 0.7% in the first three months of the year compared with the previous quarter, exceeding the initial estimate of 0.6%. GDP fell for two consecutive quarters in the second half of 2023.
The figures were released less than a week before Britons vote in an election that polls suggest will see Labour, led by Keir Starmer, easily defeat Prime Minister Rishi Sunak's Conservatives.
Longer-term growth prospects are weak, contributing to Sunak’s electoral difficulties. Compared with the same quarter last year, GDP grew by just 0.3%, above the initial estimate of 0.2%.
Real disposable household income – a measure of the standard of living – was 0.6% lower per person in the first quarter of 2024 than in the last quarter of 2019, the time of the UK’s last national election and just before the Covid-19 pandemic.
“Resolving this massive contraction in living standards is the ultimate test of who wins the election,” said Adam Corlett, an economist at the Resolution Foundation.
The UK economy has been struggling since the last election, hampered not only by the pandemic – which has dealt a lasting blow to the workforce – but also by rising inflation in the wake of Russia’s invasion of Ukraine and post-Brexit trade frictions.
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