United Kingdom GDP (GBP bn)

Economic activity rebounds in January

GDP expanded 0.3% in month-on-month seasonally-adjusted terms in January, which contrasted December’s 0.5% decrease and beat forecasts of 0.1% growth. The figure was driven by a rebound in the services sector, with the education, health, transport and recreation subsectors contributing the most to the expansion. In contrast, the manufacturing and construction sectors shrank.

On a rolling quarter-on-quarter basis, GDP was flat in November last year to January, matching October–December’s reading.

On the latest reading, Bloomberg’s Kallum Pickering said:

“Headline GDP data continue to suggest stagflation rather than outright recession. As balance sheets across the private sector are in good health and the labour market is holding up well even as financial conditions tighten, our earlier calls for a historically mild recession now appear too pessimistic. […] For now, at least, the UK economy is weathering the host of severe headwinds almost as well as the Eurozone.”