In January, the UK economy saw a slight growth of 0.2%, as reported by the Office for National Statistics (ONS). This growth was primarily fueled by increased sales in both physical and online stores, along with more construction activities.
The services sector, which includes retail and hospitality, played a significant role in this improvement, growing by 0.2%. This marks a positive change from December's 0.1% decrease in output. Retailers experienced a boost from January sales, contrasting with the previous quarter's challenges, including a drop in shopper numbers during the pre-Christmas period.
Despite the positive signs in January, the production sector, including manufacturing, dropped by 0.2% over the three months leading to January, and the services sector's performance remained unchanged. Britain entered a recession at the end of 2023, defined by two consecutive quarters of economic contraction, with a 0.3% shrinkage in the economy from October to December, following a decline from July to September.
Prime Minister Rishi Sunak has emphasised economic growth as a key goal, especially significant as the UK faces higher prices and interest rates. The OBR projects a 0.8% growth for the UK economy in 2023, with an expectation for inflation to drop below the Bank of England's 2% target by the end of June.
This comes at a challenging time for global economies dealing with the aftermath of the pandemic, including energy price surges and supply chain disruptions.
Talk to us about your business.
