UK economy rebounded beating expectations.
In January the UK economy rebounded, beating expectations following a decline in December.
Gross domestic product was up 0.3 percent in the first month of 2023, after it fell 0.5 percent in the run-up to Christmas.
The improvement was driven by growth in the services sector, according to the official statistics published ahead of the Budget next week.
The expansion was higher than the 0.1 per cent forecast by economists polled by Reuters.
The services sector rose 0.5 per cent, propelled by education, transport and storage, and human health activities.
The rebound seems largely down to the UK services sector, which was up 0.5 percent after falling 0.8 percent in December.
Meanwhile, construction fell by 1.7 percent and production by 0.3 percent
Looking at the broader picture, the Office for National Statistics said GDP has been flat in the three months to January 2023.
Head of Investment Research at Wealth Club, Jonathan Moyes, said GDP growth beat expectations by 0.2 percentage points in January, having tipped the month for just 0.1 per cent growth.
The economic outlook is much improved, data shows, energy prices are falling sharply, China is reopening, and interest rate expectations have eased significantly.
All eyes will now turn to Jeremy Hunt and the Spring Budget next week.
Last month, the chancellor branded the UK economy resilient after narrowly missing a recession towards the end of last year amidst zero growth.
Senior sales trader at Saxo UK, William Marsters, said with a recession almost a done deal a few months back, he agreed with Hunt that the economy has fought back strongly with the likes of the services sector performing well in recent weeks.
Despite the good news for now, a recession remains very much on the horizon as the UK enters a period of contraction.
“Interest rates are also expected to be hiked again by the Bank of England later this month, with which a significant rise could tip the scales.
Source: Financial Times