Investment - Articles - UK bounces out of short and shallow recession

 Danni Hewson, head of financial analysis at AJ Bell, comments on the latest UK GDP figures: “The UK has charged out of what will go down in the history books as the shortest, shallowest recession on record. After months of floundering around a flatline, growth of 0.6% will give the UK economy a real confidence boost.

 “Services and manufacturing have helped offset ongoing challenges being faced by the construction sector. Not only has it been dampened by real life downpours, but the Bank of England’s continued rate pause has softened demand from would-be homeowners whilst changing working habits have pushed businesses to rethink their office requirements.

 “Falling inflation and rising wages have given households a bit more in the tank and they’ve upped their spend, something that will need to continue if the trajectory is to be maintained.

 “Andrew Bailey painted a bucolic picture of a recovering economy which will be further boosted by any rate cut tailwinds. But the resilience being demonstrated by most sectors could be seen as a reason for MPC members to keep their finger on the pause button for a little while longer.

 “We’ve not yet seen the impact of the cut to National Insurance or the increase in the national minimum wage on consumer spending patterns and there have been plenty of businesses making it crystal clear that increased wage costs would have to be passed on.

 “Those green shoots we’ve heard so much about since the start of the year have sprouted nicely, but it will only take one spring storm to damage the burgeoning flowers.”