Britain grew faster than expected in January, as consumers shake off Brexit anxiety, but the longer-term picture is less rosy
- Breaking: GDP up by 0.5% in January
- Fastest monthly growth in two years
- Services, manufacturing and construction all grew
- But economy only grew 0.2% in November-January quarter
- Economists: Economy still subdued
Britain’s economy isn’t “out of the woods yet” despite recording decent growth in January, says Yael Selfin, chief economist at KPMG UK.
“The first glimpse of GDP data for this year points to a UK economy hovering well below its growth potential, as we wait for the Brexit fog to dissipate.
“Clarity on the direction of Brexit should lift business confidence and increase investment, but that could take time to materialise, so we expect growth to remain subdued in the short-term.
John Hawksworth, chief economist at PwC, says the pick-up in growth in January is welcome, but not the end of the story:
“There was some good news on the economy this morning ahead of the Brexit vote and Spring Statement, as monthly GDP bounced back more strongly than expected in January after falling sharply in December.
“All major sectors of the economy saw a return to positive growth in January, with a particularly marked turnaround in construction sector output as a 2.8% fall in December was entirely reversed in January.