The British economy is heading towards a turning point

DrBritish Prime Minister Rishi Sunak may be desperate for good economic news in an election year, but the data remains weak. Britain's economic output grew by a meager 0.1 percent in February, the ONS's statistics office said on Friday. This was lower than in January, with growth of at least 0.3 percent. This means that the recession into which the country slid in the second half of 2023 is likely to be over. But there can be no talk of a strong recovery yet. Finance Minister Jeremy Hunt described the new figures as a “welcome sign that the economy is now heading in the right direction.” The government can build on this success “if we stick to our plan.” The Conservatives have been claiming for weeks that they alone have a plan, but not the Labor opposition, which, according to all opinion polls, has the best chance of achieving a major electoral victory this year. According to opinion polls, things look bleak for the Conservatives.

Prime Minister Sunak had hoped that a strong economic recovery would give him a tailwind, but that has not materialized so far. Some economists are somewhat more optimistic about development. Sanjay Raja, an economist at Deutsche Bank in London, believes that the kingdom is facing a turning point. “We are beyond the technical slump and the outlook looks brighter than it did a few months ago.” Sunak and Hunt had secretly hoped the central bank would give the economy more momentum by cutting interest rates soon. However, their calculation that a rapid decline in inflation – recently at 3.4 per cent – would give the central bank room to quickly cut interest rates, does not appear to be working.