UK financial system rebounds however Ukraine battle clouds outlook

The UK financial system bounced again shortly in January from the harm brought on by the Omicron coronavirus outbreak, with a swift restoration within the companies sector driving development.

Gross home product elevated 0.8 per cent on the earlier month, sooner than analysts had anticipated, after shrinking 0.2 per cent in December, official information confirmed on Friday.

The Workplace for Nationwide Statistics mentioned that on this month-to-month measure, GDP was 0.8 per cent above its pre-pandemic degree. The restoration, nonetheless, has been uneven, with manufacturing and client dealing with companies nonetheless falling nicely quick, whereas development and all different companies recovering extra strongly.

The figures affirm that the unfold of the Omicron variant dealt solely a quick setback to the UK’s restoration, however economists warn that the outlook for development is darkening, because the battle in Ukraine fuels inflation, consuming into family incomes, and threatens additional disruption to provide chains.

Suren Thiru, head of economics on the British Chambers of Commerce, mentioned the figures had been “pushed into the rear-view mirror by renewed home and world shocks”, whereas Yael Selfin, chief economist at KPMG, mentioned development momentum was “more likely to be derailed” by the battle.

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