The UK economy showed some encouraging signs of growth at the start of 2024, after falling into a slight recession in the second half of last year.
British gross domestic product grew 0.2% in January compared to the previous month, figures from the Office for National Statistics showed, in line with forecasts.
But economic growth was down 0.1% for the three months to the end of January compared to the preceding period, which represented an easing from the previous 0.3% decline.
Year-on-year, three-month GDP was down 0.3%.
Commenting on the GDP figures, ONS director of economics statistics Liz McKeown 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.”
Sam Miley, managing economist at CEBR, said the data provides "an early indication that the downward pressure on economic activity experienced towards the end of 2023 has not continued into 2024".
"This corroborates with several timely indicators, which have suggested that the economy has passed a turning point since the start of the year and that the recessionary period is already over," Miley added.
Martin Beck, chief economic advisor at the EY ITEM Club, said the uptick in January recovers "most of the ground lost at the end of last year".
He said the EY ITEM Club forecast is for GDP to have risen further in February, and expects to see "solid GDP growth in Q1 2024, largely reversing the fall in output seen in H2 2023".
Looking further out, he said the prediction is for "decent growth during 2024, with a marked fall in inflation offering strong support to real incomes".
The GDP update adds to "growing evidence that the UK is emerging from its technical recession, although it’s hard to say that the economy is bouncing back", said market analyst Kathleen Brooks at XTB.
As growth was flat in the three months to January, this suggests "the service sector still has room to expand to stop the UK economy from flatlining".