16. Weekly Newsletter

UK economy grows for 2nd consecutive month in February

A lucrative couple of months for the manufacturing industry has resulted in the UK economy growing for the 2nd month in February. According to the latest Office for National Statistics figures, GDP rose by 0.1% between January and February. In February, manufacturing output increased by 1.2%, marking a significant increase in the likelihood of an overall economic expansion during the first quarter, which would end the technical recession the UK fell into at the end of 2023. For the economy to contract in the first quarter, GDP would have to fall by 1% or more in March. Furthermore, even a marginal increase in GDP would amount to a 0.4% rise in the first quarter, which would be much stronger than the 0.1% initially forecasted by the Bank of England.

Chancellor Jeremy Hunt said the figures were a “welcome sign” that the economy is “turning a corner” and that they bring optimism for UK Prime Minister Rishi Sunak, who has put economic growth at the forefront of his upcoming general election.

There was mixed performance across sectors in February. Services output marginally grew, whereas construction output fell by 1.9% due to poor weather conditions.

Newspapers

Over the last seven days, the UK’s front page news cycle has covered varied topics. UK reconsiders AI legislation as potential risks continue to emerge, Tata Steel workers vote to strike over Port Talbot furnace closures, and Rishi Sunak falls short of pledge to cut waiting list for NHS in England. Some of the newspaper headlines from this week were:

• Financial Times- ‘Next UK government will face biggest challenge since WW2, warns Ken Clarke’
• Financial Times- ‘Hedge fund accused of masterminding tax fraud in £1.4bn High Court trial’
• Financial Times- ‘Tesco forecasts rising profits as inflation ‘lessens substantially’
• Financial Times- ‘High mortgage rates lead to rise in lending scams’
• The Guardian-’ UK general election opinion poll tracker: Labour leading as election looms’
• The Times- ‘It’s unsustainable’: hotels brace for the minimum wage rise’

France disputes new UK fishing access rules

Last month, the UK banned the most destructive form of fishing involving dragging nets across the sea floor- bottom trawling. This was banned in 13 protected areas within the UK’s territory, and the law applied to British and French boats. The Rassemblement National is accusing the UK of taxing an “axe” to the French fishing industry after bottom trawling has been banned in an area of around 4,000 square kilometres inhabiting rare rocks, reefs and fish. Paris has asked the EU to decide whether this breaches the post-Brexit Trade and Cooperation Agreement, which would lead to punishments against the UK. This heated disagreement is the second one this year over marine conservation involving the UK.

Earlier this year, Sweden and Denmark also demanded action against the UK after it closed a section of the Dogger Bank in the North Sea to protect seabirds. This sparked outrage among the Swedish and Danish fishing communities, which used this area to catch sand eels for use as pig feed and to produce fish oils.