UK GROWS A BIT

GRASSMONSTER SAYS:

UK GROWS A BIT – BUT DON’T EXPECT FIREWORKS JUST YET

It’s official – the UK economy is growing. Barely. Just enough to stop the doom merchants from setting off the klaxon, but not nearly enough to warrant anyone dusting off bunting or booking champagne.

In the first quarter of 2025, the British economy managed a 1% GDP rise, thanks in part to strong service sector activity, modest consumer confidence, and the fact that we’re no longer locked in the economic equivalent of a Victorian workhouse.

The chancellor is calling it “resilience.” Economists are calling it “fragile optimism.” The public is calling it “still broke.”

Still, growth is growth. And the Bank of England – that stern-faced gang armed with inflation graphs and very cautious adjectives – is now widely expected to cut interest rates at least twice before the year is out. That would be a welcome breather for businesses gasping under borrowing costs that feel like being mugged with a clipboard.

But before anyone gets excited, there are a few soggy clouds to watch. Trade deficits remain awkward, particularly with Europe. Productivity remains flatter than a Northern pub lager. And the labour market, while stable, is showing signs of fatigue – a nation working more hours to afford the same loaf of bread.

Meanwhile, inflation is declining at a crawl, still leaving many households in a weird limbo – not drowning, but definitely not swimming.

In other words, the economy’s growing – but it’s still wearing its hospital gown, walking gently down the corridor with a nurse watching from behind.

Recovery? Maybe. Boom? Not even close.

#UKEconomy #GDPGrowth #InterestRates #CostOfLiving #SlowRecovery #GrassmonsterReports

Author: @grassmonster

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