UK avoids recession | House prices edge up


Office workers by Alex Kotliarskyi

Britain’s economy eked out a small growth in output in the first quarter, unrevised from an initial estimate published last month.

Figures from the Office for National Statistics show gross domestic product grew by 0.1% in the first three months of 2023 from the final quarter of last year. GDP also had grown by 0.1% in the fourth quarter of 2022 from the third.

Services grew by an unrevised 0.1% in the quarter, “driven by increases in information and communication, and administrative and support service activities”, ONS said. The UK production sector also was confirmed to have grown 0.1%.

Construction sector growth was revised down to 0.4% from 0.7% previously, and manufacturing growth was revised up to 0.6% from 0.5%.

Year-on-year, GDP grew by 0.2% in the first quarter, ONS confirmed. It had expanded 0.6% year-on-year in the fourth quarter of 2022.

Manufacturing in China contracted for a third straight month, and employment looks weaker, prompting calls for more aggressive government support.

However, London was expected to open higher on the back of the UK GDP figure and strong US economic data which eased recession fears and boosted hopes of a “soft landing” amid monetary tightening.

In New York, the Dow Jones Industrial Average closed up 0.8%, the S&P 500 up 0.5%, and the Nasdaq Composite flat.

US economic growth was revised upwards, while labour market data remained robust. The figures followed Wednesday’s trio of good news when new housing sales, durable goods orders, and consumer confidence figures were all stronger-than-expected in the US.

House prices

UK house prices rose unexpectedly, in June although the annual trend is downward.

Nationwide Building Society says house price edged up by 0.1% this month, on a seasonally-adjusted basis. Economists had predicted a fall of 0.3%.

On an annual basis, house prices are 3.5% lower than a year ago, a small acceleration on the 3.4% fall in May (which was the fastest drop since 2009).

Nationwide reports that all regions except Northern Ireland recorded annual price falls in Q2.

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