GDP Indicates the UK’s Out of a Recession

UK GDP data out this morning has shown that we’re out of recession, with growth in the first quarter better than originally estimated. The growth wasn’t exactly spectacular and was driven by the services sector, but it’s a win all the same.

Certainly, this will be something for the government ministers to shout about when they do the rounds of the Sunday sofas this weekend. Jeremy Hunt has already said “We’re growing this year and have the best outlook among European G7 countries over the next six years, with wages growing faster than inflation, energy prices falling and tax cuts worth £900 to the average worker hitting bank accounts”.

Though a six-year forecast seems a bit long term to be boasting about (and if you wound back six years, nobody would have heard of Covid-19, we were wondering if we’d ever leave Europe and we were complaining that Theresa May was a ruthless Home Secretary and incompetent Prime Minister… oh how times change!)

In the US: The Biden administration is set to announce some new tariffs on China, as early as next week. The levies will hit strategic sectors, such as solar panels, electric vehicles, and semi-conductors.

The move is a delicate balance for the White House, who are generally trying to improve relations with Beijing, but also want to take a tougher stance in a voting year to try and challenge Trump’s approach – which would be a more sweeping, less targeted, imposition of tariffs. The Biden team argue that such a move would risk being inflationary, whilst their approach should help level the playing field in areas that the US is trying to build up domestic manufacturing capacity for.

China are obviously unhappy about this, particularly as their domestic economy isn’t performing brilliantly. Both sides have said they don’t want a trade war, but this could be a slippery slope.

The Killers’ “Mr Brightside” has become the biggest selling song to have never reached top of the charts. This comes as the song has spent seven years in the UK top 100 charts and having 5.57 million combined sales (where 100 paid streams or 600 free streams is recognised as a sale). Accordingly, the song has overtaken Oasis’ “Wonderwall” as the top selling song to have never gained the top spot.

The 2003 single which subsequently featured on the album Hot Fuss became a global success and in 2010 Rolling Stone Magazine put “Mr. Brightside” as the 48th-best song of the 21st century. The song hit its top position on the American music magazine Billboard in 2005 reaching number 10.

It has since had 530 million streams online.

In fact, the song’s success continues to show signs of growing having seen its combined weekly sales up 23% on the year.

On the subject of the commercial success of songs, the 2019 hit “Blinding Lights” by the Weeknd is the most streamed song ever on Spotify. The song has over 4.2 billion streams on Spotify, far exceeding Ed Sheeran’s “Shape of You” which comes in second place at 3.87 billion steams.

According to Guinness World Records, Bing Crosby’s “White Christmas” is the bestselling single worldwide of all time. The record has had 50 million sales, exceeding that of Elton John’s “Candle in the Wind” which has 33 million sales.

Continuing on this theme, do check out our playlist for this week.

Yesterday, the Bank of England met market expectations in holding their benchmark policy rate at 5.25%, marking the sixth consecutive hold.

Here, two members of the nine person MPC voted to cut rates by 25bps, an increase from the last policy decision which saw just one member vote to cut.

Policy makers also downwardly revised inflation expectations while upwardly revising their outlook on the country’s economic growth. For example, UK growth is expected at 0.4% over the first quarter of 2024 while inflation will likely subside to the central bank’s 2% target in the coming months (though may well rise back above this level thereafter).

Following the interest rate decision, the Chancellor Jeremy Hunt indicated that the Bank of England should not loosen monetary policy too fast too soon.

Here, Hunt stated that “What we want is sustainably low interest rates, and I think what’s encouraging is that the Bank of England governor, for the first time, has expressed real optimism that we’re on that path.”

Attention now turns to the release of UK inflation data on 22 May.