UK’s chances of exiting recession increasing according to Capital Economics

The probability of the UK exiting recession is increasing, according to an analysis by Capital Economics. An analyst at Capital Economics, suggests that the UK’s chances of exiting a short-term recession have increased at the beginning of 2024.

The economy, which showed growth of 0.2% in January, has raised hopes of returning to growth in the first quarter of the year following the recession in the second half of 2023. Same person predicts that gross domestic product will increase by 0.1% quarter-on-quarter, exceeding expectations.

However, the Director of Economics at the Institute of Chartered Accountants in England and Wales, highlights the possibility of a slow economic recovery. The domestic production, which increased more than expected in January due to strong retail spending, indicates signs of recovery.

However, same person points out that rainy weather conditions in February may have suppressed activities, and high interest rates and labor shortages will continue to make recovery challenging.