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UK economy rebounds as Rishi Sunak says confidence is returning

The prime minister has said "confidence is returning" after official figures showed the economy grew by more than expected in January.

Rishi Sunak said the data confirmed the government's plan is "the right one and we need to stick to it".

The economy expanded by 0.3% in January, rebounding from a sharp fall in December.

Higher school attendance and the return of Premier League football after the World Cup helped boost the figure.

The data comes ahead of Wednesday's Budget, when Chancellor Jeremy Hunt will set out the government's growth plans.

January's growth followed a 0.5% contraction in the economy during December. However, the ONS figures also showed that the economy stagnated in the November to January period compared with the previous three months.

Mr Sunak added that the data showed the economy is "better than people had feared".

But Rachel Reeves, Labour's shadow chancellor, said: "Today's results show our economy is still inching along this Tory path of managed decline."

However, other economists were more upbeat including Goldman Sachs, the investment bank, which predicted that the UK will avoid a downturn.

Economists at the US investment bank said survey data for February pointed to continued momentum, meaning it no longer believed the economy would shrink by 0.4pc in the first three months of the year, and would instead flatline.

The positive performance also prompted Deutsche Bank to remove its recession forecast, while analysts at Citi also said survey data suggested the UK was on course to expand rather than shrink at the start of 2023. “We see further upside risks ahead here as public sector strike action was wound down,” said Benjamin Nabarro, an economist at Citi. JP Morgan said as early as last month that the UK would dodge a recession.


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