UK economy averted recession as service sector booms

Posted on May 12, 2023

Britain’s economy is at its strongest level in a year as households are still spending money amid the cost of living crisis to avoid recession.

Bumper activity in the UK’s services sector boosted the overall economy away from the negative forecasts.

Bank of England officials and experts at the Office for Budget Responsibility a few months ago warned of a recession this year, but those chances have been trashed due to stronger spending.

The country's gross domestic product grew by 0.1% in the first 3 months of this year, putting the country in a position to avoid recession in H1 2023.

However, the Bank’s 11th consecutive interest rate hike of 4.25% and global supply chains stabilized output growth,  halting British factories.

The services index grew by 4.53 points to 98.22, the best improvement since January 2022, and the highest level since August 2022.