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UK economic growth, January 2024

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UK GDP growth in January 'not a hugely positive picture' but it's progress, economist says

LONDON — U.K. gross domestic product grew 0.2% in January, the Office for National Statistics said Wednesday, as construction output jumped more than expected.

The headline figure was in line with the forecast from economists polled by Reuters.

It follows a 0.1% contraction in December, while the U.K. economy entered a shallow recession in the second half of last year.

Construction output rebounded from contraction to grow 1.1% in January, the ONS said, but fell 0.9% over a three-month period. The U.K.’s dominant services sector recorded a 0.2% rise in January, providing the biggest contribution to growth, as production output fell 0.2%.

Despite recording monthly growth, GDP was estimated to have shrunk 0.3% compared with a year ago in January, and fallen 0.1% over the three months to January 2024.

UK budget announcement is 'careful and thoughtful,' ex-finance minister says

Jack Meaning, chief U.K. economist at Barclays, described the figures as “not a hugely positive picture, but it’s ahead of where we were at the end of last year.”

“Industrial and manufacturing have been weak for the last few prints, you’d expect some bounce-back from that in the end,” Meaning told CNBC’s “Squawk Box Europe” Wednesday.

“This is good to see, but we’ll have to see it on a more prolonged basis to know that it is something sustained.”

The latest figures are consistent with a forecast for a “gradual recovery in activity” in the coming months, said James Smith, developed markets economist at ING.

“We think the decline in overall fourth quarter GDP, which marked the second consecutive quarter of negative growth and therefore a technical recession, is unlikely to be repeated in the first quarter of 2024,” Smith said in a note.

The British pound was slightly lower against the U.S. dollar and the euro following the release.

Economics

What would Robert F. Kennedy junior mean for American health?

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AS IN MOST marriages of convenience, Donald Trump and Robert F. Kennedy junior make unusual bedfellows. One enjoys junk food, hates exercise and loves oil. The other talks of clean food, getting America moving again and wants to eliminate oils of all sorts (from seed oil to Mr Trump’s beloved “liquid gold”). One has called the covid-19 vaccine a “miracle”, the other is a long-term vaccine sceptic. Yet on November 14th Mr Trump announced that Mr Kennedy was his pick for secretary of health and human services (HHS).

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Economics

What would Robert Kennedy junior mean for American health?

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AS IN MOST marriages of convenience, Donald Trump and Robert F. Kennedy junior make unusual bedfellows. One enjoys junk food, hates exercise and loves oil. The other talks of clean food, getting America moving again and wants to eliminate oils of all sorts (from seed oil to Mr Trump’s beloved “liquid gold”). One has called the covid-19 vaccine a “miracle”, the other is a long-term vaccine sceptic. Yet on November 14th Mr Trump announced that Mr Kennedy was his pick for secretary of health and human services (HHS).

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Economics

UK economy ekes out 0.1% growth, below expectations

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Bank of England in the City of London on 6th November 2024 in London, United Kingdom. The City of London is a city, ceremonial county and local government district that contains the primary central business district CBD of London. The City of London is widely referred to simply as the City is also colloquially known as the Square Mile. (photo by Mike Kemp/In Pictures via Getty Images)

Mike Kemp | In Pictures | Getty Images

The U.K. economy expanded by 0.1% in the third quarter of the year, the Office for National Statistics said Friday.

That was below the expectations of economists polled by Reuters who forecast 0.2% gross domestic product growth on the previous three months of the year.

It comes after inflation in the U.K. fell sharply to 1.7% in September, dipping below the Bank of England’s 2% target for the first time since April 2021. The fall in inflation helped pave the way for the central bank to cut rates by 25 basis points on Nov. 7, bringing its key rate to 4.75%.

The Bank of England said last week it expects the Labour Government’s tax-raising budget to boost GDP by 0.75 percentage points in a year’s time. Policymakers also noted that the government’s fiscal plan had led to an increase in their inflation forecasts.

The outcome of the recent U.S. election has fostered much uncertainty about the global economic impact of another term from President-elect Donald Trump. While Trump’s proposed tariffs are expected to be widely inflationary and hit the European economy hard, some analysts have said such measures could provide opportunities for the British economy.

Bank of England Governor Andrew Bailey gave little away last week on the bank’s views of Trump’s tariff agenda, but he did reference risks around global fragmentation.

“Let’s wait and see where things get to. I’m not going to prejudge what might happen, what might not happen,” he told reporters during a press briefing.

This is a breaking news story. Please refresh for updates.

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