The UK economic system grew by 0.2% based on the most recent figures from the Workplace for Nationwide Statistics this morning.
The brand new figures, in step with economists’ predictions, had been boosted by an enchancment within the providers sector and building sector.
Lindsay James, funding strategist at Quilter Traders, mentioned the ONS figures means that the UK is already on target to be pulled out of its brief recession.
The UK economic system entered recession with a 0.1% fall in December.
Ms James mentioned: “Whereas the 0.2% uptick represents only one month of knowledge, after a greater begin to the yr for the providers and building sectors, it might signify the beginning of a barely extra optimistic interval for the UK given among the challenges dealing with the economic system are starting to ease.
“Inflation is anticipated to fall within the coming months, due partly to a decrease power worth cap which might assist alleviate the strain on UK households and help the restoration of the consumer-driven economic system.
“With this in thoughts, alongside this morning’s GDP determine, the UK inflation print subsequent week shall be intently watched by the Financial institution of England forward of its rate of interest determination the next day.”
Tom Stevenson, funding director at Constancy Worldwide, mentioned the enhancing outlook for the UK economic system might result in a optimistic shift in sentiment in direction of the UK inventory market.
He mentioned: “The UK’s brief and shallow recession might already be over. GDP progress in January was, as anticipated, 0.2%, fuelled by a stronger service sector.
“Regardless of the return to progress, there was nonetheless a modest contraction for the three months from November to January in comparison with the prior three months. Alongside yesterday’s rise in unemployment and slowing wage progress, this exhibits that the UK economic system will not be out of the woods simply but.
“The Financial institution of England is more likely to sit on its arms throughout the first half of the yr because it waits for a clearer image of the place progress and inflation are heading.
“The restoration from the shallow recession throughout the second half of 2023 does, nevertheless, construct on the extra optimistic tone from the Workplace for Finances Duty which final week raised its forecasts for progress to 0.8% for 2024 and 1.9% in 2025.”