LONDON (AFP) – Britain’s economy rebounded in January, official data showed yesterday, after it narrowly avoided recession in the fourth quarter despite soaring inflation.
Gross domestic product grew 0.3 per cent, the Office for National Statistics (ONS) said in a statement, as the services sector offset a poor performance by construction and manufacturing.
GDP had dropped 0.5 per cent in December amid widespread strikes as many workers protested over pay that has failed to keep pace with runaway inflation.
“The economy partially bounced back from the large fall seen in December,” said ONS director of economic statistics Darren Morgan.
“The main drivers of January’s growth were the return of children to classrooms, following unusually high absences in the run-up to year end festivities, the Premier League (football) clubs returned to a full schedule after the end of the World Cup and private health providers also had a strong month.
“Postal services also partially recovered from the effects of December’s strikes.”
Britain dodged recession last year, but is forecast to contract throughout this year according to the Bank of England (BOE).
Output has been dogged by decades-high United Kingdom (UK) inflation, despite a recent easing, and hit also by rising BOE interest rates.
The economy had registered zero growth in the final three months of last year, after shrinking 0.3 per cent in the prior three months.
That avoided a technical recession, which is defined as two straight quarters of economic contraction.
The ONS warned however yesterday that the economy registered flat growth in the three months to January.
And gross domestic product (GDP) was also flat in January compared with the same month a year earlier.
“This tallies with the idea that the UK economy is going to shrink overall this year, even if a technical recession is avoided,” said Hargreaves Lansdown analyst Sophie Lund-Yates.
“The takeaway for businesses is unfortunately that things are going to remain very challenging, with stagnation a likely scenario for some time.”