LONDON (AP) — The British economy bounced back strongly in the first three months of the year, bringing to an end to what economists termed a “technical recession”, official figures showed Friday.
The Office for National Statistics said the economy grew by 0.6% in the first quarter from the previous three-month period, with broad-based strength across the crucial services sector in particular.
The increase was higher than the 0.4% predicted by economists and the strongest since the fourth quarter of 2021 when the economy was rebounding following the sharp contraction during the coronavirus pandemic.
It comes after two quarters of modest declines, which in the U.K. is defined as a recession.
Despite the quarterly increase, the British economy has barely grown over the past year. It has been hobbled by interest rates at 16-year highs of 5.25%.
There was hope Thursday that they may be on the way down soon. Bank of England Gov. Andrew Bailey indicated that a rate cut may be on the cards in June if inflation continues to trend downwards.
The Bank of England, like the U.S. Fed and other central banks around the world, raised interest rates aggressively in late 2021 from near zero to counter price rises first stoked by supply chain issues during the coronavirus pandemic and then by Russia’s invasion of Ukraine.
High interest rates — which cool the economy by making it more expensive to borrow — have helped ease inflation, but they’ve also weighed on the British economy.
Economists laid out the hope that, with inflation cooling and interest rates lower, the British economy may be entering a period of more sustained growth. However, it's not expected to be particularly strong, with the Bank of England predicting only 0.5% growth this year.
“This is a surprisingly strong recovery and a likely turning point for the economy," said Debapratim De, director of economic research at Deloitte.
Lawmakers in the U.K.’s governing Conservative Party, which appears headed for a big electoral defeat later this year to the Labour Party, will be hoping that the economy is set fair, relieving the pressure on financially stretched households, thereby helping to fuel an economic feelgood factor.
“There is no doubt it has been a difficult few years, but today’s growth figures are proof that the economy is returning to full health for the first time since the pandemic," said Treasury chief Jeremy Hunt.
His counterpart in Labour, Rachel Reeves, said this is “no time for Conservative ministers to be doing a victory lap and telling the British people that they have never had it so good.”
Andrew Bailey, Governor of the Bank of England, speaks during the Bank of England Monetary Policy Report press conference at the Bank of England, London, Thursday May 9, 2024. (Yui Mok/PA via AP)
British economy rebounds strongly in first quarter of the year, ending 'technical recession'
British economy rebounds strongly in first quarter of the year, ending 'technical recession'
A general view of the Bank of England in London, Thursday May 9, 2024. The Bank of England has kept its main U.K. interest rate at a 16-year high of 5.25% with several policymakers still worrying about some key inflation measures. In a statement Thursday, the bank’s nine-member Monetary Policy Committee voted 7-2 to keep rates unchanged, with the 2 dissenters backing a quarter-point reduction. (Yui Mok/PA via AP)
JERUSALEM (AP) — The helicopter crash in which Iranian President Ebrahim Raisi, the country’s foreign minister and other officials were killed is likely to reverberate across the Middle East, where Iran’s influence runs wide and deep.
That's because Iran has spent decades supporting armed groups and militants in Lebanon, Syria, Iraq, Yemen and the Palestinian territories, allowing it to project power and potentially deter attacks from the United States or Israel, the sworn enemies of its 1979 Islamic Revolution.
Tensions have never been higher than they were last month, when Iran under Raisi and Supreme Leader Ayatollah Ali Khamenei launched hundreds of drones and ballistic missiles at Israel in response to an airstrike on an Iranian Consulate in Syria that killed two Iranian generals and five officers.
Israel, with the help of the United States, Britain, Jordan and others, intercepted nearly all the projectiles. In response, Israel apparently launched its own strike against an air defense radar system in the Iranian city of Isfahan, causing no casualties but sending an unmistakable message.
The sides have waged a shadow war of covert operations and cyberattacks for years, but the exchange of fire in April was their first direct military confrontation.
The ongoing war between Israel and Hamas has drawn in other Iranian allies, with each attack and counterattack threatening to set off a wider war.
It's a combustible mix that could be ignited by unexpected events, such as Sunday's deadly crash.
Israel has long viewed Iran as its greatest threat because of Tehran's controversial nuclear program, its ballistic missiles and its support for armed groups sworn to Israel's destruction.
Iran views itself as the chief patron of Palestinian resistance to Israeli rule, and top officials for years have called for Israel to be wiped off the map.
Raisi, who was a hard-liner viewed as a protégé and possible successor of Khamenei, chastised Israel last month, saying “the Zionist Israeli regime has been committing oppression against the people of Palestine for 75 years.”
“First of all we have to expel the usurpers, secondly we should make them pay the cost for all the damages they have created, and thirdly, we have to bring to justice the oppressor and usurper," he said.
Israel is believed to have carried out numerous attacks over the years targeting senior Iranian military officials and nuclear scientists.
There is no evidence Israel was involved in Sunday's helicopter crash, and Israeli officials have not commented on the incident.
Arab countries on the Persian Gulf have also long viewed Iran with suspicion, a key factor in the decision of the United Arab Emirates and Bahrain to normalize relations with Israel in 2020, and of Saudi Arabia to consider such a move.
Iran has provided financial and other support over the years to the Palestinian militant group Hamas, which led the Oct. 7 attack into Israel that triggered the Gaza war, and the smaller but more radical Palestinian Islamic Jihad, which took part in it. But there is no evidence that Iran was directly involved in the attack.
Since the start of the war, Iran's leaders have expressed solidarity with the Palestinians. Their allies in the region have gone much further.
Lebanon's Hezbollah militant group, Iran's most militarily advanced proxy, has waged a low-intensity conflict with Israel since the start of the Gaza war. The two sides have traded strikes on a near-daily basis along the Israel-Lebanon border, forcing tens of thousands of people on both sides to flee.
So far, however, the conflict has not boiled over into a full-blown war that would be disastrous for both countries.
Iran-backed militias in Syria and Iraq launched repeated attacks on U.S. bases in the opening months of the war but pulled back after U.S. retaliatory strikes for a drone attack that killed three American soldiers in January.
Yemen's Houthi rebels, another ally of Iran, have repeatedly targeted international shipping in what they portray as a blockade of Israel. Those strikes, which often target ships with no apparent links to Israel, have also drawn U.S.-led retaliation.
Iran's influence extends beyond the Middle East and its rivalry with Israel.
Israel and Western countries have long suspected Iran of pursuing nuclear weapons in the guise of a peaceful atomic program in what they see as a threat to non-proliferation everywhere.
Then-President Donald Trump's withdrawal from a landmark nuclear pact between Iran and world powers in 2018, and his imposition of crushing sanctions, led Iran to gradually abandon all the limits placed on its program by the deal.
These days, Iran is enriching uranium to up to 60% purity — near weapons-grade levels of 90%. Surveillance cameras installed by the U.N. nuclear agency have been disrupted, and Iran has barred some of the agency's most experienced inspectors. Iran has always insisted its nuclear program is for purely peaceful purposes, but the United States and others believe it had an active nuclear weapons program until 2003.
Israel is widely believed to be the only nuclear-armed power in the Middle East but has never acknowledged having such weapons.
Iran has also emerged as a key ally of Russia following its invasion of Ukraine, and is widely accused of supplying exploding drones that have wreaked havoc on Ukraine's cities. Raisi himself denied the allegations last fall in an interview with The Associated Press, saying Iran had not supplied such weapons since the outbreak of hostilities in February 2022.
Iranian officials have made contradictory comments about the drones, while U.S. and European officials say the sheer number being used in the war in Ukraine shows that the flow of such weapons has intensified since the war began.
In this photo provided by Moj News Agency, rescue teams' vehicles are seen near the site of the incident of the helicopter carrying Iranian President Ebrahim Raisi in Varzaghan in northwestern Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (Azin Haghighi/Moj News Agency via AP)
An Iranian woman prays for President Ebrahim Raisi in a ceremony at Vali-e-Asr square in downtown Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (AP Photo/Vahid Salemi)
People pray for President Ebrahim Raisi in a ceremony at Vali-e-Asr square in downtown Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (AP Photo/Vahid Salemi)
FILE - People gather around a component from an intercepted ballistic missile that fell near the Dead Sea in Israel, Saturday, April 20, 2024. The apparent crash of a helicopter carrying Iranian President Ebrahim Raisi, the country's foreign minister and other top officials is likely to reverberate across the Middle East. Tensions have soared since the start of the Israel-Hamas war, and Israel and Iran directly traded fire for the first time ever in April. (AP Photo/Itamar Grinberg, File)
FILE - Iranian worshippers chant slogans during an anti-Israeli gathering after Friday prayers in Tehran, Iran, Friday, April 19, 2024. The apparent crash of a helicopter carrying Iranian President Ebrahim Raisi, the country's foreign minister and other top officials is likely to reverberate across the Middle East. Tensions have soared since the start of the Israel-Hamas war, and Israel and Iran directly traded fire for the first time ever in April. (AP Photo/Vahid Salemi, File)
