City snapshot: Economy grows in February as UK emerges from recession

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The UK economy grew in February despite high levels of rainfall, suggesting the country is emerging from the recession in the final two quarters of 2023.

The Office of National Statistics said this morning that monthly real gross domestic product is estimated to have grown by 0.1% in February 2024, following growth of 0.3% in January 2024.

That January growth was revised upwards from 0.2% growth in its initial estimation.

Therefore, real gross domestic product is estimated to have grown by 0.2% in the three months to February 2024, compared with the three months to November 2023.

Services output grew by 0.1% in February 2024, following growth of 0.3% in January 2024 and has grown by 0.2% in the three months to February 2024.

Production output grew by 1.1% in February 2024 and was the largest contributor to the growth in GDP in the month, following a fall of 0.3% in January 2024 and has now grown by 0.7% in the three months to February 2024.

Construction output fell by 1.9% in February 2024, following growth of 1.1% in January 2024.

The ONS said that some industries continue to see supply chains affected by disruption in the Red Sea. These comments to the survey centred in the wholesale trade excluding motor vehicles and motorcycles, warehousing and human health industries.

Looking at the reason for this global supply chain disruption, around 50% of businesses across the economy cited “conflict in the Middle East” as the reason.

There were also negative comments provided to the MBS by the construction and food and beverage industries regarding wet weather in February 2024 (which was the fourth wettest February on record in England according to the Met Office’s Monthly climate summary.

This was also reported in our Retail sales, Great Britain: February 2024 bulletin as a factor for fewer sales by household goods and food stores but increased online sales.

Morning update

On the markets this morning, the FTSE 100 has jumped 0.9% on the economic data to 7,996.2pts.

Risers include Just Eat Takeaway.com, up 7.1% to 1,321p, Bakkavor, up 1.7% to 117p and McBride, up 1.4% to 111.5p.

Fallers include FeverTree, down 1.2% to 1,084p, Hilton Food Group, down 0.5% to 880p and Naked Wines, down 0.4% to 58.5p.

Yesterday in the City

The FTSE 100 closed yesterday back down 0.5% to 7,923.8pts.

Tesco reversed its gains of Wednesday following its annual results, dropping 5.1% back to 282p.

Other fallers included Just Eat Takeaway.com, down 4% to 1,234p, Sainsbury’s, down 2.8% to 259.8p, Reckitt Benckiser, down 2.3% to 4,206p, SSP Group, down 2.1% to 213.4p and Compass Group, down 1.9% to 2,177p.

The day’s risers included McBride, up 4.8% to 110p, PayPoint, up 2.3% to 489p, Imperial Brands, up 1.6% to 1,706.5p, Kerry Group, up 1.5% to 79.9p and Tate & Lyle, up 1.5% to 640.5p.