UK economy coming out of recession as GPD rises to 0.2% in January

The UK economy is slowly coming out of recession as official statistics released showed a growth of 0.2 percent in Gross Domestic Product, GDP, in January.

The Office for National Statistics, ONS, on Wednesday said that the dominant services sector led the economy out of the mild recession of the second half of last year, following a decline of 0.1 percent in December

“A strong month for retail sales helped drive growth in January, with consumers making the most of post-Christmas sales and spending more in supermarkets.

“It was also helped by improved activity for house builders, thanks to new work and repair and maintenance jobs, following a sluggish year for the wider housing market,” it noted.

The report indicated that the economy could be turning a corner after dipping into a technical recession at the end of last year, with GDP declining by 0.3per cent over the fourth quarter.

Director of Economic Statistics at ONS Liz McKeown said, “a slight rebound in growth in January could raise hope that the UK is already on its way out of what would be a short-lived and shallow downturn.

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“The economy picked up in January with strong growth in retail and wholesaling.

“Construction also performed well with house builders having a good month, having been subdued for much of the last year.

“These were partially offset by falls in TV and film production, lawyers and the often-erratic pharmaceutical industry.

“Over the last three months as a whole, the economy contracted slightly.”

Chancellor Jeremy Hunt commented that “While the last few years have been tough, today’s numbers show we are making progress in growing the economy.

“Part of which makes it possible to bring down national insurance contributions by 900 euros this coming year.”

“But if we want the rate of growth to pick up more, we need to make work pay which means ending the unfairness of taxing work twice,” he added.

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