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UK GDP: A bigger bounce than expected, but not a strong data point

10th March 2023

Commenting on this morning’s UK GDP data Melanie Baker, Senior Economist at Royal London Asset Management, said:

“UK GDP saw a partial bounce in January after a strike-affected December and one that was stronger than consensus expectations.

“That marks an OK start to Q1 and business surveys, namely the PMI surveys, look consistent with increases in private sector output in February.

“Strike action makes the GDP numbers difficult to interpret though and the bigger point still holds: The UK economy isn’t in the healthiest state. If you look at the level of GDP it has been broadly flat since late 2021.

“Even as the UK continues to escape a technical recession, the UK economy still faces a significant list of challenges, particularly around cost-of-living challenges and higher interest rates, let alone ongoing strike action. I still don’t expect the UK economy to escape technical recession altogether this year.”