It returns to growth to start the year after stumbling into a shallow recession
The UK economy rebounded in January with a slight increase in gross domestic product (GDP), according to the Office for National Statistics (ONS).
Monthly real GDP rose by 0.2% in January, marking a recovery from a 0.1% decline in December 2023.
Despite this uptick, when comparing the three months to January 2024 with the preceding three months, GDP showed a marginal decrease of 0.1%.
Still, the UK’s prospects for a swift recovery from recession have improved following the release of the official statistics for January.
“If the return to growth can be sustained, the country should be on course to exit recession in pretty short order – a relief for the government even if the man or woman on the street is unlikely to notice the difference between anaemic growth and mild recession,” said Nicholas Hyett, investment manager at Wealth Club.
The latest ONS figures also showed that the services sector, which saw 0.2% growth in January, played a pivotal role in the month’s GDP improvement. However, over the three-month period leading up to January 2024, the sector did not register any growth.
Meanwhile, the production sector faced challenges, witnessing a 0.2% drop in output in January. This decline was consistent over the three months to January 2024, with production output decreasing by the same margin.
The construction sector showed signs of vitality with significant 1.1% growth in January 2024. Despite this positive movement, the sector recorded a 0.9% decrease in output when looking at the three-month period ending in January 2024.
GDP grew by 0.2% in January 2024:
— Office for National Statistics (ONS) (@ONS) March 13, 2024
▪️ services grew (+0.2%)
▪️ production fell (-0.2%)
▪️ construction grew (+1.1%)
➡️ https://t.co/BI2AKHq15P pic.twitter.com/faOMPOvahB
“The economy picked up in January with strong growth in retail and wholesaling,” commented Liz McKeown, director of economic statistics at the Office for National Statistics. “Construction also performed well with housebuilders having a good month, having been subdued for much of the last year.
“These were partially offset by falls in TV and film production, lawyers, and the often-erratic pharmaceutical industry. Over the last three months as a whole, the economy contracted slightly.”
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