The United Kingdom’s economy rebounded more quickly than initially reported during the first quarter of 2024, according to revised figures released by the Office for National Statistics on Friday. However, the overall economic outlook remains uncertain as the country heads into a critical general election.
The latest data indicates that the UK’s Gross Domestic Product (GDP) grew by 0.7% from the previous quarter, surpassing the earlier estimate of 0.6%. This growth follows a period of recession, with GDP contracting for two consecutive quarters in the latter half of 2023.
Despite this positive adjustment, the broader economic context remains challenging for Prime Minister Rishi Sunak’s Conservative Party, which faces an uphill battle in the upcoming election. Opinion polls suggest that the Labour Party, under the leadership of Keir Starmer, is on track for a decisive victory.
Although the economy expanded by 0.3% compared to the same period last year—slightly higher than the initial estimate of 0.2%—the long-term growth trend is still weak. This sluggish performance has contributed to the difficulties facing Sunak’s government in the lead-up to the election.
One of the key issues has been the decline in real household disposable income, a critical measure of living standards. In the first quarter of 2024, disposable income per capita was 0.6% lower than it was in the final quarter of 2019, just before the last general election and the onset of the COVID-19 pandemic.
Adam Corlett, principal economist at the Resolution Foundation, highlighted the severity of this decline.
“Income growth over the parliament so far has been worse than in any other since the 1950s, and the third worst in post-Edwardian Britain,” Corlett remarked, emphasizing that “addressing this great living standards slowdown is the ultimate test for whoever wins the election.”
The UK economy has faced significant challenges since the last election, including the lasting impact of the COVID-19 pandemic on the labour force, a sharp increase in inflation following Russia’s invasion of Ukraine, and ongoing trade disruptions post-Brexit.
As of the first quarter of 2024, the UK’s economy was only 1.8% larger than it was at the end of 2019. This makes it the weakest performer among the G7 nations, trailing behind Germany, although France and Japan have also experienced minimal growth during this period.
With the election just days away, the state of the economy remains a crucial issue for voters, but the recent uptick in GDP growth may not be enough to sway the outcome in favour of the Conservatives.
