A late update: The FTSE 100 share index has finished the day at a new alltime high of 8433 points.

That’s a gain of 52 points, or 0.6%, and means the blue-chip share index has racked up its third weekly gain in a row. It’s been on quite the rally since mid-April.

Matt Britzman, equity analyst at Hargreaves Lansdown, says:

“It’s Friday afternoon, the sun’s out, and the FTSE 100 has closed at an all-time high – no this is not a dream. Investors are finally starting to look at UK businesses and see reasons to be optimistic. The Bank of England held rates steady earlier in the week but hinted at rate cuts to come. Meanwhile, economic growth came in better than expected, but crucially not too much better to drive up fears it could cause inflation to spike. This comes on the cusp of major UK banks reporting over the past couple of weeks, and there was a huge array of optimism from management teams around the outlook for the UK.

Many will look at this run and assume it has no legs, UK investors have been beaten down too many times in the past. UK bulls will argue it’s been long overdue, with the market suffering from a hefty valuation discount to global peers for some time. Next week’s jobs and wages data will be key for momentum, markets will want to see continued signs that stickier elements of inflation are easing, or it’ll raise fresh questions about if and when rate cuts might come.”

Time to recap….

The UK is officially out of recession after figures showed the economy grew by 0.6% in the first three months of the year.

The Office for National Statistics (ONS) said the period from January to the end of March marked a return to growth after a mild recession in the second half of 2023. It was the strongest rate of quarterly growth since the end of 2021, and a better performance than expected by economists, who forecast growth of 0.4% in the first quarter.

The downturn came to an end after an increase in activity across the services sector, which has flourished since the turn of the year as wages have outstripped inflation, easing the pressure on consumers.

However, forecasters expect the UK to grow slowly this year as high interest rates and last year’s inflation surge continue to take their toll on disposable incomes.

The Bank of England has predicted that a lack of momentum in the economy means gross domestic product (GDP) will grow by only 0.5% this year. The Bank kept interest rates unchanged at 5.25% on Thursday but indicated it may begin cutting them from June.

Economists broadly hailed the pick-up in growth, which suggests the UK economy may do better this year than expected.

Here’s the full story:

And our analysis:

Optimism over economic prospects, and hopes that interest rates will soon be cut, helped to push the UK’s FTSE 100 to a new intraday high of 8455 points today – on track for another strong week.

And in other news:

Over in the City of London today, Standard Chartered has been accused of being complicit in environmental destruction by environmental activists, at its annual general meeting.

A group called the Climate Choir Movement sang a tune called “Fossil Fuels are Trouble”, a reworking of Taylor Swift’s hit “I Knew You Were Trouble”

They say Standard Chartered is complicit in environment destruction and human rights violations in the Philippines and Mozambique.

Here’s a clip from the AGM:

Jo Flanagan, co-founder of the Climate Choir Movement, says:

“Last year we sang at Barclays AGM. In March we occupied and sang in the Houses of Parliament. And today we say to Standard Chartered ‘your standards are twisted’. While they continue to invest in dirty gas and coal, global warming has exceeded temperatures of 1.5 degrees Celsius over a 12-month period.

This is a dire warning to humanity — a warning that some bankers still do not seem to heed.”

Luxury carmaker Jaguar Land Rover (JLR) has reported its highest ever yearly sales and its biggest profit in nearly a decade.

In a sign that JLR’s customers are not cutting back, the auro maker has reported £29bn revenues in the year to March, over a quarter higher than the previous year.

This was driven by record sales of its Range Rover vehicles.

Around 133,000 vehicles had been ordered at the end of the financial year, three quarters of which were for Range Rover, Range Rover Sport and Defender models.

The group’s pre-tax profit hit £2.2bn, the highest amount since 2015, it said.

Customers clearly weren’t put off by a wave of thefts of Range Rovers, which has pushed up the cost of insuring the cars.

Inded, JLR reports that there is strong interest in its Range Rover Electric, with over 28,700 sign ups to the waiting list since opening in December 2023.

Today’s UK GDP report shows that the economy is “finally catchig up a bit”, says Holger Schmieding, chief economist at Berenberg bank.

Schmieding explains:

After years of self-inflicted Brexit turmoil, the UK economy can – from a somewhat depressed level – expand at a pace at least in line with that of its biggest trading partner, the Eurozone. The solid gain in GDP reduces the need for an immediate rate cut.

Schmieding adds that the UK economy has underperformed the US and the Eurozone since the start of the pandemic, telling clients:

The slump in 2020 was deeper and the subsequent recovery levelled off in 2022 even more so than in the Eurozone in the wake of the surge in energy and food prices. The strong Q1 GDP data partly correct an unexpectedly weak finish to 2023

Richard Walker, the executive chairman of Iceland Foods, says it is “immeasurably wrong” of the government to tell people to be grateful the recession is over.

Speaking to Radio 4’s The World At One, Walker explains that consumers are still suffering from the cost of living squeeze, even though the economy is growing.

Walker – who quit the Conservatives last October – says:

My customers are still paying the price of the Truss calamity. Inflation is still baked in and day-to-day living expenses are still very much affected.

We’ve had years of price rises now, and people do feel worse off, because they are.

Walker adds that Iceland recently conducted a survey of 4,000 customers – it found that 94% said conditions are not getting any better. Many cited sub-par public services and unaffortable childcare.

He adds:

I think it’s immeasurably wrong of the government to tell people to feel grateful that we’ve exited recession.

Rishi Sunak has insisted that “things are starting to feel better” and that confidence in the economy is growing after the UK economy moved out of recession, PA Media report.

On a visit to Siemens Healthineers factory in Eynsham, Oxfordshire, Sunak claimed that the Government’s economic plan was working.

Sunak told Siemens workers:

“After undoubtedly a difficult couple of years that the country has had, actually now things are starting to feel better.

“Confidence is returning to the economy and the country, and I hope that you’re starting to feel that too.”

Sunak, and chancellor Jeremy Hunt, were shown Siemans machines at the factory and given a demonstration of the magnet technology being developed at Eynsham.

The UK economy is likely to keep growing at a decent pace during the current quarter, according to the National Institute of Economic and Social Research (NIESR).

They are predicting GDP will rise by 0.6% in April-June, matching the forecast-beating 0.6% expansion reported in January-March this morning.

NIESR say:

The fact that the UK’s GDP growth transitioned into positive territory after experiencing the shallow recession in the second half of 2023 is encouraging. However, the UK economy has largely flatlined following the initial stages of post-pandemic recovery. To escape the low-growth trend into a new and sustained era of high output growth requires structural changes and public investment.

We expect that monthly GDP will continue its momentum in April, growing by 0.1 per cent relative to March, driven by growth mainly in services and production, particularly Agriculture.

Indeed, the S&P Global/CIPS UK services PMI reported an optimistic balance of 55.0 in April up from 53.1 in March. In line with this positive sentiment, we now forecast GDP to grow by 0.6 per cent in the second quarter of 2024, mainly driven by services sectors.

The European Central Bank is poised to start cutting its key interest rates next month, the record of their last meeting show.

The minutes of the ECB’s April meeting, where it left borrowing costs on hold, have been released – and show that policymakers were more confident that the “disinflationary process” was continuing.

This indicates that the ECB’s governing council could vote for a rate cut next month, if new economic forecasts suggest inflation is indeed falling.

The minute say:

Members concurred that the most recent information had broadly confirmed the March staff projections, thus increasing their confidence that the disinflationary process was continuing

At the same time, important new data – including new staff projections – would be released ahead of the June meeting, allowing the Governing Council to make a more comprehensive assessment. While progress had been seen, monitoring the triangle between wages, productivity growth and profits continued to be key. It was seen as plausible that the Governing Council would be in a position to start easing monetary policy restriction at the June meeting if additional evidence received by then confirmed the medium-term inflation outlook embedded in the March projections.

The Bank of England’s chief economist, Huw Pill, is briefing the Bank’s agents now following yesterday’s interest rate decision.

Pill says the Bank has sent a “relatively clear signal” that it is comforted by recent falls in inflation, which do raise the prospect of reducing the amount of restrictive monetary policy in the system.

But, if rates are to be cut, there needs to be sufficient evidence that the downward path of inflation is strong enough to justify it, Pill says.

Pill explains that he is focused on the underlying components of inflation, not the headline rate – which dropped to 3.2% per year in March.

He also suggests it’s “a little ill-advised” to just focus on the June meeting – reminding agents that governor Andrew Bailey said yesterday a June rate cut was neither ruled out nor a fait accompli.

The first quarterly expansion in a year. Recession receding into the rear-view mirror. A stronger performance in recent months than the Bank of England and the City had thought likely. Faster growth in early 2024 than any other member of the G7 group of leading industrial nations.

When you are in as deep a political hole as the current government you seize on any good news, and there was plenty for Jeremy Hunt to choose from in the latest figures from the Office for National Statistics. The figures were proof that the economy was returning to “full health for the first time since the pandemic”, the chancellor said.

Yet when people look back on the early months of 2024 they will probably remember the relentlessly awful weather rather than a time when the economy was cooking with gas. Boom-boom Britain it certainly isn’t.

To be sure, the UK has emerged from recession but the downturn in the second half of 2023 was a much more modest affair than some of the monster downturns of the past 50 years. The hollowing out of manufacturing in the early 1980s was a genuine slump, as was the housing market crash in the early 1990s and the near collapse of the banks in the global financial crisis of 2008.

The bigger picture is that Britain’s growth performance during the current parliament has been extremely weak…..

More here:

The 2023 drop in GDP, now consigned to history, is the third UK recession in 16 years.

The contraction in the third-and fourth quarter of last year follows the slump in the first half of 2020 during Covid-19 lockdowns, and the contraction from spring 2008 to summer 2009 during the financial crisis.

James Smith, research director at the Resolution Foundation, says the recent frequency of recessions is a concern.

“The UK swiftly exited its latest recession in 2024 with the strongest economic growth since late 2021.

“But the wider backdrop is still worrying. Britain is falling into recession twice as frequently as it did in the second of the 20^th century, and it remains a stagnation nation. These all-too regular shocks and slumps in between are reducing living standards and straining the public finances.

“The battle of ideas on how to change this record should be key during the election campaign.”

The odds of the Bank of England cutting interest rates next month have narrowed this morning.

The money markets indicate that a June rate cut, to 5%, is now a 48% chance, while there’s a 52% possibility that the BoE holds rates at 5.25%.

Yesterday, the decision was almost a coin-toss too, with a 55% chance of no-change in June.

On Thursday the BoE left rates on hold, with two policymakers voting for a cut but seven choosing not to ease policy.

Derek Halpenny, head of research for global markets at financial group Mitsubishi UFJ, says the BoE is inching toward a June rate cut

He told clients:

Most of the key guidance comments from [governor Andrew] Bailey and [deputy governor Ben] Broadbent in the press conference and again from Bailey in a Bloomberg TV interview after the press conference were clear in signalling rate cuts are coming.

Mostly notable was Bailey’s Comment that the monetary stance would “likely” need to be made less restrictive and “possibly more so than currently priced into market rates”. That comment really couldn’t be much clearer in signalling where the bias is shifting within the MPC and in our view strengthens the prospect of a June cut.

High interest rates are likely to weigh on growth this year, even if we do get the two quarter-point cuts which markets expect.

Moody’s Analytics senior economist David Muir explains:

“With inflation moderating, the Bank of England is signalling that a rate cut is on the cards for the summer.

But first the Monetary Policy Committee needs further evidence that wage growth and price pressures within services are easing sufficiently. If that evidence builds quickly, a rate cut could come as soon as June, but we think August is the more likely date.

That said, even as rates are lowered, they will remain a constraint on the pace of economic growth through this year.”

Chancellor Jeremy Hunt is arguing that the UK’s GDP growth shows that the Government’s decisions are paying off.

He told Sky News this morning:

“We’re seeing that inflation is falling faster and I think people recognise it has been a very, very challenging period but they don’t vote for Conservative governments for us to do popular things, they trust is to do the right thing for the long-term benefit of the economy.”

He told Radio 4’s Today Programme that families who have been through “a really tough time” can see that the “very difficult decisions” taken to get the economy back on its feet after the pandemic and the energ shock” are working.

Hunt also claims that the UK’s longer-term prospects are strong – citing IMF forecasts for faster growth than France, Italy, Germany or Japan over the next six years.

Hunt also disputed that the Conservative’s reputation for economic competence had been crushed by Liz Truss’s mini-budget.

Hunt, who replaced Kwasi Kwarteng after the markets reacted very badly to the Truss administration’s package of unfunded tax cuts, concedes that mistakes were made, but that he corrected them within weeks.

Hunt says:

When interest rates and the prices people pay for mortgages have gone up all across the developed world following the energy shock caused by the invasion of Ukraine, it’s just wrong to attribute that to the mini-budget.

Hunt also predicted that mortgage rates are likely to start to fall, as inflation drops towards the UK’s 2% target – which could allow the Bank of England to lower interest rates.

Is Hunt right, though, that the mini-budget shouldn’t take the blame for the UK’s mortgage shock?

It is true that morgage rates have risen in the US, and in the eurozone, as central banks have tightened monetary policy by raising interest rates.

Looking back, the mini-budget triggered a massive selloff in government bonds – forcing the Bank of England to launch emergency action to halt a run on Britain’s pension funds.

More than two-fifths of Britain’s mortgage deals were withdrawn in the week after the mini-budget, as lenders rushed to reprice them, higher.

UK mortgage rates did fall in 2023, as the shock of the mini-budget subsided, but have been rising in recent weeks on concerns that interest rates might not be cut as soon as hoped (although the BoE suggested yesterday it could cut faster than expected).

So, even if the Truss shock has now dissipated, some unlucky mortage-holders who had to refinance their loan shortly after the mini-budget ended up paying much more…

Britain’s blue-chip share index has soared to another all-time high in early trading in London, amid relief that the UK’s recession is over.

The FTSE 100 index has jumped over the 8400 point mark for the first time, hitting a new intraday high of 8425 points – up 45 points this morning.

Mobile network operator Vodafone is the top riser, up 2%, after the UK cabinet office conditionally approved its merger with rival Three (although the competition authorities are yet to give their ruling).

Mining companies are also in the top risers, along with luxury goods maker Burberry (+1.7%), airline easyJet (+1.4%) and housebuilder Berkeley (+1.3%)

Susannah Streeter, head of money and markets at Hargreaves Lansdown, says today’s growth report is lifting confidence:

The 0.6% growth registered in the first three months of the year was higher than forecast, with the green shoots seen in January and February flowering into a stronger growth spurt in March.

Confidence breeds more optimism, and with the economy showing signs of repairing and the FTSE 100 rallying higher, the glass half full sentiment is settling in. The blue-chip index has powered higher in early trade and set fresh records, after a sheen of positivity has descended on the UK.

The FTSE 100 has been on a strong rally since mid-April, and is on track for its third weekly rise in a row. It’s gained almost 9% so far this year.

Hopes that the economy was strengthening, and that interest rates will be cut this year, have both pushed up share values in London in recent weeks.

However, the FTSE 100 isn’t really a barometer of the strength of the UK economy, rather it is an outward-looking index comprising largely of multinational conglomerates.

Victoria Scholar, head of investment at interactive investor, says:

“After the FTSE 100 hit a record high for the fourth straight session on Thursday, the UK index has opened higher yet again and is potentially on track to close at another all-time high.

Shares in Anglo American are up on a report that Rio Tinto also considered a bid following BHP’s rejected offer. M&A speculation is helping to keep Anglo shares supported at the moment.

The UK has grown faster than many of its major rivals at the start of this year, as it emerged from recession.

The 0.6% growth recorded in January-March is faster than the US, where GDP rose by 0.4%, Germany (+0.2%), France (+0.2%) or Italy (+0.3%).

Out of the remaining G7 nations, Canada is estimated to have also grown by 0.6% in Q1, while economists predict Japan will have grown by 0.2%.

Since the pandemic, the UK is one of the slower-growing economies, today’s GDP report shows:

Although Simon French, chief economist at Panmure Gordon, reports that the UK is in bronze medal position since 2016:

Britain’s “living standards recession” is also, finally, over, after a two year squeeze.

Today’s GDP report shows that real GDP per head is estimated to have increased by 0.4% in the first quarter.

This measure of GDP per capita divides UK GDP by the total UK population, to get a more accurate view of how living standards are changing.

GDP per head had fallen steadily through 2023, and indeed hadn’t grown for seven quarters in a row.

Even after rising by 0.4% in January-March, GDP per head is estimated to be 0.7% lower than a year ago.

TUC General Secretary Paul Nowak says:

“The UK economy has stopped shrinking. But one quarter of decent growth won’t make up for 14 years of lost living standards.

The Tories are still presiding over the worst period for economic stagnation and livelihoods in modern history.

Real wages are worth less than in 2008 and working people will end this parliament worse off than at the start.

Workers would be over £10,000 richer if pay had kept pace with its pre-crisis trend.

The Conservatives have succeeded only in making families poorer.”

City experts are welcoming the news that Britain’s economy has returned to growth.

Richard Carter, head of fixed interest research at Quilter Cheviot, hopes that the UK’s economic stagnation will subside this year:

“With interest rate cuts seemingly pencilled in for the summer, the good news continues to flow for the UK as today’s data shows the UK is out of recession. The first quarter saw GDP grow by 0.6%, better than expected, as inflation has eased and the worst of the cost-of-living crisis is behind us.

The increase in GDP has primarily been driven by the UK’s strong services sector, which it has come to rely on in recent years to help push the economy forward.

“While growth remains fairly lacklustre compared to the likes of the US, this data shows this should be the year that economic stagnation subsides in the UK and the economy returns to consistent, if unspectacular, growth. It is the unspectacular nature of the growth, however, that is likely to be focus. While the very shallow and short recession appears over, there is a clamour for interest rate cuts to begin in order to stimulate growth and get business moving again. Markets await the first interest rate cut with bated breath, so it will be interesting to see the economic reaction once those rate cuts begin feeding through.

Yael Selfin, chief economist at KPMG UK, believes the worst is over, and that there will be continued growth for the rest of this year.

Falling inflation and real pay increases should help repair some of the damage to household incomes and support households’ consumption. Growth prospects have also improved in Europe, which could spur a recovery in exports.

“Despite the better near-term outlook, the improvement in GDP growth looks likely to be constrained by the ongoing weakness in productivity growth as well as reduced scope to increase employment levels. This could see annual GDP growth in the region of just 1% per year in the medium term.

“UK GDP grew by 0.4% in March, supported by a rise in services output which grew by 0.5%. Forward looking indicators point to further momentum in the coming months, consistent with our view that the worst is behind the UK economy.”

But… Suren Thiru, economics director of ICAEW, says the end of the recesion is a “rather hollow victory”, which could encourage the Bank of England to keep interest rates high for longer…

“These figures confirm an easy exit from the shallowest of recessions for the UK, as lower inflation helped return the economy to growth in the first quarter.

The UK’s escape from recession is a rather hollow victory because the big picture remains one of an economy struggling with stagnation, as poor productivity and high economic inactivity limits our growth potential.

The economy could struggle to kick on further in the second quarter as the boost to people’s incomes from weaker inflation is partly curtailed by renewed caution to spend and invest, amid higher unemployment and ongoing political uncertainty.

The strong exit from recession may inadvertently keep UK interest rates higher for longer by giving those policymakers still worried about underlying inflationary pressures enough comfort on economic conditions to continue putting off cutting rates.”

Labour’s shadow chancellor, Rachel Reeves, has posted that it’s ‘time for change’.

Following this morning’s GDP report, Reeves says:

From no growth to low growth - is that really the scale of the Conservatives’ ambitions?

Food prices are still high, families are paying more on their monthly mortgage bills and working people are worse off.

Although most of the economy grew in the last quarter, there are some warning lights flashing in the construction sector.

Construction output fell by 0.9% in January-March, for the second quarter in a row.

That means construction is in recession; output is 0.7% lower than the same quarter a year ago.

The fall reflects a decline in new work of 1.8% driven by private commercial new work, which fell by 5.3%.

However, repair and maintenance increased 0.3%, which the ONS says may be due to housing associations re-directing their budgets towards repairs and upgrading “to deal with problems such as damp arising from tenants using less heating because of the higher cost of living”.

Wet weather this year also dampened construction activity, as the swathe of storms kept workers off building sites.

Nicholas Hyett, investment manager at Wealth Club, says:

Construction remains the one area of weakness, particularly in the commercial sector. That’s no surprise.

Real estate is particularly exposed to the effect of higher interest rates, and the upheaval of the pandemic is still rocking the office and retail sector - with increased home working and online shopping permanently changing demand. That’s not a trend that’s unique to the UK.

Chancellor of the Exchequer Jeremy Hunt has hailed the news that Britain’s recession is over, saying:

“There is no doubt it has been a difficult few years, but today’s growth figures are proof that the economy is returning to full health for the first time since the pandemic.

“We’re growing this year and have the best outlook among European G7 countries over the next six years, with wages growing faster than inflation, energy prices falling and tax cuts worth £900 to the average worker hitting bank accounts.”

I hate to burst the chancellor’s bubble, but the UK is also expected to be the worst-performing economy in the G7 next year. Still, these forecasts are there to be beaten….

ONS director of economic statistics Liz McKeown has told Radio 4’s Today programme that the 0.6% growth recorded in the last quarter is stronger than people expected.

Compared to recent figures, we last saw growth this strong in the last quarter of 2021, McKeown explains.

McKeown pointed to the pick-up in service sector growth, but also pointed out that construction shrank – due to a decline in new work.

McKeown says:

“After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year.

“There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well. Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction.

“In the month of March the economy grew robustly led, again, by services with wholesalers, the health sector and hospitality all doing well.”

Growth in March alone was also stronger than expected.

GDP rose by 0.4% in March, the ONS reports, beating City forecasts for 0.1% growth.

The services sector had a good month, growing by 0.5% in March, while production output grew by 0.2%. Construction output fell by 0.4% in the month, though.

February’s GDP data has been revised higher too, to show growth of 0.2% (up from 0.1% first estimated).

Newsflash: The UK’s short, shallow, recession is over.

The UK economy grew by 0.6% in the first quarter of this year, the Office for National Statistics has reported.

That’s stronger growth than expected.

The ONS says the recovery was driven by the services sector, and industry:

• In output terms, services grew by 0.7% on the quarter with widespread growth across the sector; elsewhere the production sector grew by 0.8% while the construction sector fell by 0.9%.

• In expenditure terms, there were increases in the volume of net trade, household spending and government spending, partially offset by falls in gross capital formation.

This rise in GDP means that the economy is no longer in a technical recession, after activity fell in the third and fourth quarters of last year.

GDP is the standard measure of economic activity, but it has its critics too.

It tracks what’s happening across the economy, but does not distinguish between harmful and beneficial activity.

Back in 1968, US presidential candidate Bobby Kennedy issued a magisterial rebuke, saying GDP ‘measures everything except that which is worthwhile’.

Kennedy told the University of Kansas:

It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.

It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.

You can hear the speech here; and here:

Good morning. We’re about to discover if Britain’s economy has clambered out of recession.

New gross domestic product (GDP) figures for the first three months of this year are released at 7am, and City economists are hopeful that the economy expanded in the quarter.

If so, that would mean that the shallow recession that began in the second half of last year has ended.

A technical recession, in City jargon, is at least two quarterly falls in GDP in a row. As things stand (and data are often revised…) the UK economy shrank by 0.1% in July-September 2023, and then by 0.3% in October-December as consumer spending slumped, triggering the technical recession declared earlier this year.

Analysts are expecting to learn that UK GDP rose by around 0.4% in the January to March quarter, which would consign the recession to history.

Recent falls in inflation, and hopes that interest rates will be cut this summer, are supporting the economy. Previous data has shown that GDP rose by 0.1% in February, and 0.3% in January.

Deutsche Bank’s chief UK economist, Sanjay Raja, says:

The UK economy likely shrugged off the short and marginal technical recession it fell into last year. After contracting by 0.3% q-o-q in Q4-23, we expect the economy to bounce back, expanding by 0.4% q-o-q in Q1-24 with March GDP rising by 0.1% m-o-m.

What’s driving the recovery? In short, some positive payback with household spending bouncing back to start the year. Government investment too will have likely supported GDP through the first quarter. And we think some build up in inventories will have also helped push GDP higher in Q1-24. In short, we expect Q1-24 to signal a sustained recovery back to trend growth.

Where to now? We expect 2024 GDP to expand by 0.5%. There are some upside risks to our projection, given the continued strength of business activity data.

The agenda

• 7am BST: UK GDP report for March, and the first quarter of 2024

• 7am BST: UK trade report for March

• 12.30pm BST: European Central Bank to release accounts of its last monetary policy meeting

• 3pm BST: University of Michigan’s survey of US consumer sentiment