UK economy grew in January as Omicron eased

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The effects of the Omicron coronaviruses variant began to ease in January as UK economic growth rebounded.

The Office for National Statistics said that the economy grew by 0.8% in December.

Despite the rebound in January, economists warned that the UK could be in a recession due to economic shocks including the invasion of Ukraine.

Chancellor Sunak said it was creating economic uncertainty.

The official figures show that Wholesaling, retailing, restaurants and Takeaway all performed well.

Construction and manufacturing both grew as supply chain issues continued to dog some sectors.

The ONS director of economic statistics said that computer programming and film and TV production had a good start to the year.

GDP bounced back from the hit it took in December due to the Omicron wave and is now 0.8% above its pre-pandemic peak, he said.

All sectors grew in January with some industries that were hit particularly hard in December now performing well.

The chancellor was cautious about the UK economy.

UK households were already facing rising costs due to soaring energy costs.

Mr Sunak said that Russia's invasion is creating significant economic uncertainty, but that it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy.

He said that the government had provided unprecedented support throughout the Covid pandemic, which had put the economy in a strong position to deal with cost of living challenges.

The British Chambers of Commerce warned that the UK could be heading for a recession despite the better than expected growth in January.

While there was a strong rebound in output in January as the impact of Omicron started to ease, the figures have been pushed into the rear-view mirror by renewed domestic and global shocks.

The UK's economy could stall in the near term as rising inflation, soaring energy bills and higher taxes drag on activity, despite a probable boost to output in February from the end of Plan B Covid restrictions.

He said the invasion of Ukraine had pushed up the risk of a UK recession because it was making the cost of living crisis worse.

Kitty Ussher, chief economist at the Institute of Directors, said that the key question facing the UK economy was whether people who have enough cash to be able to choose how to spend some of it would be more pleased about the retreat of the virus than they are concerned about.