The economy expanded by 0.3% in January, proving that the country avoided recession at the end of last year.
The Office for National Statistics (ONS) reported a rebound in output last month following a larger-than-anticipated 0.5% contraction in December, which was not revised in the update.
The dismal performance during the month of December, when widespread strikes and a crisis in the cost of living combined, caused output between October and December to fall short of two consecutive quarters of negative growth.
According to the ONS, the largest contributors to growth in January came from a rebound in many sectors affected by strike action, including education, transportation, and entertainment and recreation.
It also recognized the resumption of top-tier domestic league football after the World Cup.
Darren Morgan, director of economic statistics, stated: “The economy partially recovered from the steep decline seen in December. However, the economy has shown no development over the past three months and the past 12 months as a whole.
The return of children to school after unusually high absences in the weeks leading up to Christmas, the return of Premier League clubs to a full schedule following the conclusion of the World Cup, and private health providers also had a strong month.
Postal services also partially recovered from the consequences of the strikes in December.
“These were somewhat mitigated by a notable decline in construction, as infrastructure projects slowed and housebuilding had another poor month, in part due to heavy rainfall.”
The Bank of England and OECD expect a recession in 2023.
The IMF announced in January that the nation will be the only advanced economy to enter a moderate recession.
But there is evidence ahead of next week’s budget that the UK, like its competitors, is operating better than expected.
Recent activity data about services and manufacturing have been unexpected, with a services reading last week reaching its highest level in eight months.
From their lows in 2022, consumer confidence readings have also increased.
Separate ONS data, unadjusted for inflation, revealed on Thursday that debit and credit card expenditure increased by three percentage points in the week ending March 2 compared to the same week in 2022.
Jeremy Hunt, the Chancellor, commented on the most recent growth figures: “The UK economy has proven more resilient than anticipated in the face of acute global challenges, but there is still a long way to go.
Next week, I will outline the next phase of our plan to halve inflation, reduce debt. And expand the economy so that we can raise everyone’s living standards.
Mr. Hunt will use his budget on the following Wednesday to bolster the government’s five priorities. Even though halving inflation this year is much more difficult to achieve if you want to stimulate development.
To protect households from record energy prices, he is expected to extend the energy price guarantee at the same level.
He had planned to increase the effective cap from £2,500 to £3,000 in April. But falling wholesale costs have meant the Treasury has not had to foot the bill it had initially anticipated. Leaving room to maintain aid at its current level.
However, with inflation above 10%, financial markets expect the Bank of England to raise rates. Which could further impair economic demand.
Governor Andrew Bailey has indicated that the Bank rate may have reached its apex. But that the Bank’s interest rate-setting committee will evaluate conditions based on the available data.
Rachel Reeves, the shadow chancellor for Labour, commented on the growth figures: “The results of today indicate that our economy is still inching along this conservative path of managed decline.
The answer to the question of whether people feel better off under the Conservative’s will is no.
