The UK economy contracted less than expected in January as the country was still under the implementation of tighter coronavirus closures and restrictions.
The Office for National Statistics (ONS) reported Gross Domestic Product (GDP) contracted by 2.9% after a 1.2% increase in December. Previously, the market forecast a contraction of 4.9%.
This suggests that the decline in economic activity in January was not as bad as feared even though at the time the UK was still implementing strict coronavirus restrictions.
In January, most of the workers were forced to work from home, while many non-essential shops closed, and hotel venues also closed again.
This figure will impact the Bank of England’s (BOE) decision next week in determining whether the UK needs more stimulus to recover from this recession.
Nevertheless, details from the ONS also show that the economy in January was 9% smaller than seen in February last year, compared to 4% in October which was when the UK’s early recovery was at its peak before the re -imposition of the second sanctions.