The UK is officially out of recession – what does it mean for you?

According to official figures, the UK economy grew by 0.6% between January and March, marking the fastest rate of growth in two years. 

This comes after the country had fallen into recession last year, with the economy contracting for two consecutive three-month periods.

The growth announced today by the Office for National Statistics (ONS) has been driven by strong performances from service industries, including retail, public transport, haulage, and healthcare. As well as the hospitality, arts, and entertainment sectors, which all benefitted from an early Easter in March.

The (ONS) said it could see evidence from credit and debit card transactions that consumers have been treating themselves to clothing and home furnishings over the past three months.

But growth in these sectors was offset by a weak performance in the construction sector.

The news that the UK is now out of recession comes after the Bank of England's decision yesterday to hold interest rates for the sixth time in a row.

Bank of England governor, Andrew Bailey, expressed optimism that the economy is moving in the right direction, but said that more evidence of falling inflation is needed before they can consider cutting interest rates. He refused to give an idea of when he thinks this will happen.

What does a 0.6% growth in the economy mean for you?

UK gross domestic product (GDP) is the measure of the size of the country's economy and is used to indicate its overall health.

If the economy is growing, it means the resources available to people in the country, such as goods, services, wages, and profits, are increasing.

These growth figures suggest that the economy is turning a corner, after the Bank of England and the Office for Budget Responsibility had previously expected the longest recession in 100 years and a 1.4% shrinkage in the economy.

In fact, the UK economy is now forecast to grow faster than France, Germany, Italy, and Japan over the next six years.

What is inflation?

Inflation measures the change in prices of goods and services in the economy. A drop in inflation means that prices are now rising more slowly. Combined with wages now growing faster than prices, this makes the cost of living more affordable, as you can buy more with the money in your pocket.