Hopes of economic recovery boosted as UK GDP rises by 0.2% in January

The chances of the UK quickly emerging from recession have been boosted after the release of official figures showing the economy grew by 0.2% in January.

The Office for National Statistics said national output – as measured by gross domestic product (GDP) – had increased for only the second time in the past seven months.

Financial markets had been expecting a pick up in activity after December’s 0.1% contraction, with the consensus forecast among economists a 0.2% increase.

Although the UK remains in a shallow recession after output fell in the third and fourth quarters of 2023, the news of the slight rebound in growth will come as a relief to the government.

The chancellor, Jeremy Hunt, said in last week’s budget that the economy had turned the corner after a period in which action by the Bank of England designed to tackle high inflation led to slower growth.

In the final six months of 2023, the economy grew only once – by 0.2% in November. Every other month recorded a fall or stagnation in GDP.

More details to follow …