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UK economy rebounds strongly in January

by Mike Robinson

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© Reuters. FILEPHOTO: People walk across the Millennium Bridge, London, Britain on February 16, 2022 to see the City of London Financial District. REUTERS/Henry Nicholls

LONDON, (Reuters) – Britain’s economy recovered more quickly than anticipated in January after its coronavirus-related lull late in 2021. According to Friday data that supports the argument for Bank of England policymakers raising interest rates next week.

After a decline of 0.2% in December, the Office for National Statistics reported that January’s gross domestic product increased by 0.8% month-on-month. This was higher than any economist had predicted in a Reuters poll, which indicated a 0.2% growth.

According to the ONS, all major economic sectors in Britain grew faster than predicted. The wholesale and retail sector was a key driver for the huge services sector.

According to the BoE, the economy was forecasted to grow at 3.65% this year with inflation reaching 7.25%. But those predictions have been overshadowed by Russia’s invasion in Ukraine.

However, Friday’s economic strength and rising inflation will increase the likelihood that BoE policymakers will hike interest rates next week.

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