The UK’s economy rebounded in the first quarter of 2011 experiencing a rise of 0.5% compared to a contraction of 0.5% in the 4^th quarter of 2010. However, the recovery remains fragile. With weak economic growth the Bank of England is unlikely to begin raising rates until November 2011. Sterling rallied against the US dollar, and the Euro, rising to 1.6578. The 0.5% figure was widely predicted however some had feared it could be as low as 0.3%.

Last quarter’s surprise contraction was largely caused by government austerity measures as well as the exceptionally cold weather.