However, this growth comes in a context of relatively sluggish recovery since the COVID-19 pandemic, Phil Brien, senior researcher at the House of Commons Library specialising in public spending, wrote in an economic update.
The economy has also not kept pace with growth in population. Gross domestic product (GDP) per person shrank in real terms in every quarter last year, although this measure also returned to growth in Q1 2024, he wrote.
Consumer price index (CPI)-based inflation fell to 2.3 per cent in April, well below the 11.1 per cent it reached in October 2022, which the Office for National Statistics (ONS) estimates was the highest rate since October 1981.
However, this month’s fall in inflation was not as large as economists had predicted, and the rate remains above the Bank of England’s target of 2 per cent, Brien observed.
The Bank of England currently expects inflation to rise slightly over the next year or so before returning to the target in 2026.
Labour market data has been adding to the central bank’s uncertainty about whether to reduce rates, he added.
Fibre2Fashion News Desk (DS)