UK’s economy returns to growth after rebound in entertainment and transport
The UK’s economy returned to growth in January, easing fears of an impending recession ahead of Chancellor Jeremy Hunt’s spring Budget, official figures have shown.
The Office for National Statistics (ONS) said the economy grew by 0.3% in January, following a sharp 0.5% decline in gross domestic product (GDP) in December.
The biggest driving forces behind the growth came from sectors including education, transport, health, and arts and entertainment.
Other industries like education also drove up GDP as children returned to classrooms, after an unusually high number of absences in the run-up to Christmas, the ONS said. The transport and storage sector also returned to growth as postal services partially recovered from the effect of December’s strikes.
December’s GDP figures were affected by several days of rail and postal strikes and also declining output in the entertainment sector, as the football Premier League took a break for the World Cup.
January’s figure beat expectations with analysts predicting that the economy would eke out 0.1% growth in the month.
The figures also show the construction sector declined by 1.7% after being flat in December, which the ONS said could partly be owed to heavy rainfall in the first two weeks of January slowing down building. But housebuilders have flagged a general decline in work recently amid a slowdown in the housing market.
In response to the GDP data, Chancellor Jeremy Hunt said: “In the face of severe global challenges, the UK economy has proved more resilient than many expected, but there is a long way to go.
“Next week, I will set out the next stage of our plan to halve inflation, reduce debt and grow the economy – so we can improve living standards for everyone.”
Shadow chancellor Rachel Reeves, meanwhile, said: “Today’s results show our economy is still inching along this Tory path of managed decline.
“People will be asking themselves whether they feel better off under the Tories, and the answer will be no.
“But this is not a new trend. 13 years of Tory failure and wasted opportunities have left growth on the floor and our economy weakened.”
Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out