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Schools and football help UK economy rebound

Business Mar 10, 2023 at 08:46

Schools and football help UK economy rebound

The UK economy grew by 0.3% in January as school attendance picked up and Premier League football returned after the World Cup, official figures show.

Gross domestic product – a key measure all the activity of companies, governments and individuals – bounced back from a sharp fall in December.

Growth was helped by a recovery in school attendance after more parents kept children home at the end of 2022.

The data comes ahead of the Budget next Wednesday.

Chancellor Jeremy Hunt will outline the government’s plan to boost UK economic growth.

Darren Morgan, director of economic statistics at the Office for National Statistics (ONS), said: “The economy partially bounced back from the large fall seen in December.

“The main drivers of January’s growth were the return of children to classrooms, following unusually high absences in the run-up to Christmas, the Premier League clubs returned to a full schedule after the end of the World Cup and private health providers also had a strong month.

“Postal services also partially recovered from the effects of December’s strikes.”

While there was a rebound in the month of January, the ONS figures also showed that the economy stagnated in the November to January period compared with the previous three months.

Reacting to the latest figures, Mr Hunt said: “In the face of severe global challenges, the UK economy has proved more resilient than many expected, but there is a long way to go.”

Economists said that the fact that there was a bounce in January was not a surprise given a number of issues in December such as postal and rail strikes, as well as more children being kept out of school ahead of the festive season.

But the figures also showed a fall in output in both the manufacturing and construction sectors in January.

“Looking beneath the surface, the figures suggest the economy is on weaker ground than it appears,” said Ruth Gregory, deputy chief UK economist at Capital Economics.

She added that strike action in February may have hit growth and the impact of successive interest rate rises is yet to be felt by parts of the economy.

“So we doubt January’s strength will last and our hunch is that there will still be a recession,” she said.