UK economy shows greater resilience than expected

Despite an unexpected 0.3% contraction in the UK economy in March, the first quarter still saw GDP growth of 0.1%, showing greater resilience than many had expected at the start of the year.

Whether the March number is the start of a negative trend will become clearer when the April GDP estimate is published in mid-June.

For now, with the Bank of England still battling double-digit inflation, the door is certainly open to further rate rises. The FTSE 100 was steady this morning, making modest progress.

AJ Bell investment director Russ Mould said: “After a surge in jobless claims the market will be watching the release of consumer sentiment data in the US, alive to the risks of a recession as the debate continues over the likely trajectory of interest rates on the other side of the Atlantic. The latest dive in the shares of regional lender PacWest Bancorp, as deposits evaporate, only adds to the pressure on the Federal Reserve.”