UK economy in surprise bounce back ahead of Ukraine war
Challenges to come, analysts warn, with rising inflation set to trigger interest-rate rise next week Britain’s economy rebounded much more than expected in January, when the number of infections caused by the Omicron coronavirus variant eased, but the war in Ukraine darkens the outlook. Gross domestic product grew 0.8 per cent on the month in January after a 0.2 per cent decline in December — the strongest monthly expansion since June, according to the Office for National Statistics — with soaring inflation raising the spectre of an interest-rate increase next week. While January’s growth means the economy is now 0.8 per cent bigger than its pre-pandemic peak in February 2020, with growth set to continue in February, economists expect tougher times ahead. “Conflict in Ukraine is putting considerable pressure on energy and commodity prices, which, if sustained, will push inflation even higher than expected,” said Alpesh Paleja, lead economist at the Chamber of British Industry. “Th...