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The British economy expanded in January by 0.8 percent, exceeding its pre-pandemic peak by the same amount, the Office for National Statistics announced Friday.

That’s also a jump from December, when output fell by 0.2 percent as the Omicron variant weighed on economic activity.

“All sectors grew in January, with some industries that were hit particularly hard in December now performing well, including wholesaling, retailing, restaurants and takeaways,” said Darren Morgan, head of economic statistics. Software engineering and video production “also had a good start to the year.”

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Construction and manufacturing contributed to growth as well, he said.

However, analysts cautioned that the spurt of growth could be short-lived due to global factors. Capital Economics, a consultancy, said in a note that while February’s numbers are likely to be positive as well, “the cost of living crisis and the influence of the war in Ukraine probably means this is as good as it gets for the year.”

Chancellor Rishi Sunak also reacted with caution in a press release, warning that the war in Ukraine is affecting the outlook.

“Russia’s invasion of Ukraine is creating significant economic uncertainty and we will continue to monitor its impact on the U.K.,” he said. “But it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy and ensure Putin fails.”

BY MATEI ROSCA

Source: Politico

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