Revised GDP data showed the United Kingdom's economy expanded by 0.7 percent on the quarter in the three months March, just above the initial estimate of 0.6 percent. This follows a contraction of 0.3 percent in the three months to December and confirms an exit from the technical recession recorded in the second half of 2023.

Household spending rose 0.4 percent on the quarter, up from an initial estimate of 0.2 percent, while business investment rose 0.5 percent, down from an initial estimate of 0.9 percent. Government consumption was flat on the quarter, also weaker than the initial estimate of growth of 0.3 percent. Net exports added 0.6 percentage points to headline GDP growth, stronger than the initial estimate of 0.4 percentage points.

In year-over-year terms, the economy rose 0.3 percent on the year in the three months to March, again just above the initial estimate of 0.2 percent. This confirms a small rebound from the 0.2 percent contraction recorded in the three months to December.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Since 2018, the first, or provisional, estimate includes the GDP expenditure components as well as data on the main output sectors. These results are updated in the second, and final, report.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower.

Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth. For example, if the UK reports that the consumer price index has risen more than the Bank of England's 2 percent inflation target, demand for sterling could decline. Similarly, when the Bank of England lowers interest rates, the pound sterling weakens. (Currency traders also watch the interest rate spread between countries.)