The UK economy returned to growth at the start of the year, according to official figures, raising hopes that the country could be on its way out of a shallow recession.
Gross domestic product (GDP) is estimated to have risen by 0.2% in January, following a decline of 0.1% in December, the Office for National Statistics (ONS) said.
A strong month for retail sales helped drive growth in January, with consumers making the most of post-Christmas sales and spending more in supermarkets.
It was also helped by improved activity for housebuilders, thanks to new work and repair and maintenance jobs, following a sluggish year for the wider housing market.
It indicates that the economy could be turning a corner after dipping into a technical recession at the end of last year, with GDP declining by 0.3% over the fourth quarter.
A recession is defined as two consecutive quarters of negative growth.
A slight rebound in growth in January could raise hopes that the UK is already on its way out of what would be a short-lived and shallow downturn.
Liz McKeown, director of economics statistics at the ONS, said: “The economy picked up in January with strong growth in retail and wholesaling.
“Construction also performed well with housebuilders having a good month, having been subdued for much of the last year.
“These were partially offset by falls in TV and film production, lawyers and the often-erratic pharmaceutical industry.
“Over the last three months as a whole, the economy contracted slightly.”
Chancellor Jeremy Hunt said: “While the last few years have been tough, today’s numbers show we are making progress in growing the economy – part of which makes it possible to bring down national insurance contributions by £900 this coming year.”
“But if we want the rate of growth to pick up more we need to make work pay which means ending the unfairness of taxing work twice.”
