UK GDP grows 0.2 in January after 0.1 fall in Dec
Economy shrank in Q3 and Q4 2023, entered recession
Retail and housebuilding lifted growth in January
Squeeze on living standards beginning to ease

LONDON, March 13 Reuters Britain39;s economy returned to growth in January after entering a shallow recession in the second half of 2023, offering some relief to Prime Minister Rishi Sunak ahead of an election expected this year, official data showed.

Gross domestic product grew by 0.2 monthonmonth boosted by a rebound in retailing and housebuilding after a fall of 0.1 in December, in line with economists39; expectations in a Reuters poll.

The economy picked up in January with strong growth in retail and wholesaling, Liz McKeown, a director at the Office for National Statistics, said. Construction also performed well with housebuilders having a good month, having been subdued for much of the last year.

However, it is too early to know for certain if the economy is no longer in recession. GDP shrank by 0.3 in the final quarter of 2023 and 0.1 in the quarter before meeting the technical definition of recession widely used in Europe.

Britain39;s economy has been very sluggish since its initial recovery from the COVID19 pandemic, beset by a surge in the cost of energy imports from Russia39;s invasion of Ukraine and, more recently, by high Bank of England interest rates.

But with inflation at 4 in January, down from doubledigit rates in much of last year, and forecast…