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The British economy recovered at the start of the year, with figures suggesting the recession may be over.
Gross domestic product grew 0.2 percent in January, the Office for National Statistics said, boosted by a recovery in retailers and builders.
It comes after the economy contracted 0.1 percent in December.
Separate figures from pollsters suggest the housing market has become “optimistic.”
Sanjay Raja, an economist at Deutsche Bank, said: “The technical recession that the UK fell into at the end of last year will be short-lived.”
Back to growth: Gross domestic product grew 0.2% in January, according to the Office for National Statistics, boosted by the recovery of retailers and builders
Gross domestic product (GDP) contracted in the last two quarters of 2023 (meeting the definition of a recession), but it was much smaller than other recessions in recent decades, and surveys suggest the economy is recovering.
The High Street bounced back after a miserable Christmas, and construction also enjoyed a rebound after a subdued period for much of last year.
High inflation and rising interest rates have taken their toll but, as energy bills fall, inflation has come down from its peak and there are hopes that the Bank of England will soon start cutting interest rates.
Lower inflation is also contributing to wages stretching even further. This week’s figures showed that in real terms wages are growing at 2 per cent.
Suren Thiru, director of economics at the Institute of Chartered Accountants of England and Wales, said the UK “took its first step out of recession in January”.
But he warned: “January’s recovery may have been followed by a more subdued performance in February, and significant wet weather is likely to have suppressed activity.”
Meanwhile, the latest figures from the Royal Institution of Chartered Surveyors showed “reason for encouragement” for the property market as buyer interest and selling instructions increased in February.
Figures due next week are expected to show inflation will fall below 4 per cent, which could further add to the joy.
Next week will also see the Bank of England’s March interest rate decision.
Rates are expected to remain unchanged at 5.25 percent, but markets will be watching for signs of when they will begin to be cut.