UK economic growth picks up in January

According to the Office for National Statistics, the economy grew by 0.2% in January.
UK economic growth picks up in January
Woman picking out a top in a clothes storeGetty Images

The UK economy picked up in January, boosted by stronger sales in shops and online and more construction activity.

The economy grew by 0.2%, official figures show, following a fall in output during the previous month.

The Office for National Statistics (ONS) said the services sector led the bounce back, after retailers struggled to draw in shoppers in December.

This is an early estimate, but signals how the UK, which entered recession at the end of 2023, is faring.

The new figures on Wednesday were in line with what economists were expecting.

Some experts said it could suggest the economy may be turning a corner after dipping into recession at the end of last year.

Liz McKeown, director of economics statistics at the ONS, said: “The economy picked up in January with strong growth in retail and wholesaling.

“Construction also performed well with housebuilders having a good month, having been subdued for much of the last year.”

GDP monthly chart

But these areas of growth were offset by falls in TV and film production, legal services and the pharmaceutical industry which can be quite volatile.

“Over the last three months as a whole, the economy contracted slightly,” Ms McKeown said.

People spending less, doctors’ strikes and a fall in school attendance dragged the UK into a recession at the end of 2023.

The economy shrank by 0.3% between October and December, after it had already contracted between July and September. The UK is in recession if it fails to grow for two successive quarters.

Responding to the latest figures, Chancellor Jeremy Hunt said: “While the last few years have been tough, today’s numbers show we are making progress in growing the economy – part of which makes it possible to bring down national insurance contributions by £900 this coming year.

“But if we want the rate of growth to pick up more we need to make work pay which means ending the unfairness of taxing work twice.”

Source: bbc.co.uk

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