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The UK grew weakly in the first quarter of 2023, with the economy continuing to be battered by strikes and the cost of living. The economy grew 0.1% over the quarter, although it decreased by 0.3% in March, attributed to reduced car sales and poor retail activity. The data comes alongside an announcement from the BoE, in which they stated that the UK will avoid a recession completely, in a record growth upgrade.

Inflation in the US dropped to its lowest rate in two years, as incoming data last week showed that prices rose 4.9% in the year to April. Among the drivers were sharp falls in the prices of milk, airline tickets, and new cars. However, officials hesitate to declare victory, as other sectors of the economy continue to rise in price. The data shows that the prices of housing, petrol and old cars all shot up between March and April, indicating that inflation is widespread within the economy.

The BoE raised rates in the UK by 25 basis points, bringing the rate up to 4.5% – the highest in almost 15 years. However, despite the rapid interest rate hikes, prices are not slowing as quickly as predicted, attributed largely to prices in UK supermarkets remaining high despite a fall in wholesale food prices. While Governor Bailey said this was to be expected, food prices are expected to come down rapidly through the course of the year.