The UK faces emerging from recession after growing by 0.2% in January

Services and construction lead the British economy at the start of 2024. Analysts are cautious before asserting that the country has overcome the contraction it experienced in the second half of 2023.

the British economy It rose 0.2% in January, driven by construction (+1.1%) and services (+0.2%), while industrial production contracted 0.2% compared to the previous month, according to data published today by the office. Office for National Statistics (ONS). The organization warned that this is a preliminary number, and it is subject to review (increase or decrease). In any case, the increase is in litres

the British economy It rose 0.2% in January, driven by construction (+1.1%) and services (+0.2%), while industrial production contracted 0.2% compared to the previous month, according to data published today by the office. Office for National Statistics (ONS). The organization warned that this is a preliminary number, and it is subject to review (increase or decrease). In any case, the increase is in line with analysts' expectations.

Among the elements that drove progress in the first month of the year are: Sales in stores (+3.4%)In addition to increased spending on private health care, perhaps as a result of increasing waiting lists for public health care.

January indicator contrasts with Decreased by a tenth in December It indicates, in the opinion of economists, the possibility of exit from… The slight recession that the country witnessed during the second half (A decrease of 0.1% in the third quarter and 0.3% in the fourth quarter), although there are doubts.

For this year, GDP forecast is 0.8% (yesterday). The Bank of Spain spoke of 1.9% in Spain), which is the level reached by the government Rishi SunakOne of its promises was to promote the country's growth. The economy was already on the rebound, Chancellor of the Exchequer Jeremy Hunt said last week while presenting the 2024-25 budget. “The last few years have been difficult, but today’s numbers show that we are doing our job,” he said today Progress for economic growth“.

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Doubts among economists

Analysts praised January's numbers, but believe growth will be limited in the short term. “Although the economy has improved somewhat, expectations remain Relatively pessimistic“said KPMG UK Chief Economist Yael Selvin, who believes that GDP will continue to be affected by the impact of higher interest rates, at 5.25%.

It is not known whether the exit from the recession will occur in the first quarter of 2024 or later. “GDP is on track to be left behind, already in the first quarter of 2024, Technical stagnation last semester“Although that could change,” says Sandra Horsfield, a British economist at Investec, who recalls the surprise drop in GDP in the fourth quarter of 2023.

Factors that play in favor Recovery According to this expert, they are low unemployment (less than 4%), high real income due to higher salaries above inflation and reduced taxes such as Social Security.

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