Economy sees rebound in January helped by return of Premier League football
The economy rebounded to grow by 0.3% in January, according to official figures which reaffirmed that the UK avoided recession at the end of last year.
The Office for National Statistics (ONS) reported a recovery for output last month after the bigger than expected contraction of 0.5% witnessed in December, which went unrevised in the update.
The dire performance during the Christmas month, when widespread strikes combined with the cost of living crisis, meant output between October and December came in just shy of completing two consecutive quarters of negative growth.
The ONS said that the largest contributions to growth in January came from a bounce back in many sectors hit by strike action including education and transport, along with entertainment and recreation.
It also credited the return of top flight domestic league football following the end of the World Cup.
Director of economic statistics, Darren Morgan, said: “The economy partially bounced back from the large fall seen in December. Across the last three months as a whole and, indeed over the last 12 months, the economy has, though, showed zero growth.
“The main drivers of January’s growth were the return of children to classrooms, following unusually high absences in the run-up to Christmas, the Premier League clubs returned to a full schedule after the end of the World Cup and private health providers also had a strong month.
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December: Strikes, snow and Premier League suspension hit economy
“Postal services also partially recovered from the effects of December’s strikes.
“These were somewhat offset by a notable drop in construction with a slowdown in infrastructure projects and housebuilding having another poor month, partly due to heavy rainfall.”
There have been predictions, from bodies including the Bank of England and OECD, that the UK will enter recession in 2023.
The IMF declared in January that the country will be the only advanced economy to tip into recession, albeit a mild one.
But there is evidence ahead of next week’s budget that the UK is, like its rivals, performing better than many had expected.
Recent activity data covering services and manufacturing has surprised to the upside – with a services reading last week coming in at its strongest level for eight months.
Consumer confidence readings have also picked up from 2022 lows.
Separate ONS data, which is not adjusted for inflation, showed on Thursday that spending on debit and credit cards was up 3 percentage points in the week to 2 March compared with the same week in 2022.
Chancellor Jeremy Hunt said of the latest growth figures: “In the face of severe global challenges, the UK economy has proved more resilient than many expected, but there is a long way to go.
“Next week, I will set out the next stage of our plan to halve inflation, reduce debt and grow the economy – so we can improve living standards for everyone.”
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Mr Hunt will use his budget next Wednesday to bolster the government’s five priorities, though halving inflation this year is far more difficult to achieve if you want to spur growth.
He is tipped to extend – at the same level – the energy price guarantee to help shield households from record energy prices.
He had been due to raise the effective cap from April to £3,000 from £2,500 but falling wholesale costs have meant that the Treasury has not had to foot the bill it had initially feared, leaving scope to maintain aid at its current level.
But with inflation still running above 10%, the Bank of England is tipped by financial markets to add to borrowing costs through further rate rises, which could dampen demand in the economy further.
Governor Andrew Bailey has signalled that Bank rate may have peaked but that its interest rate-setting committee would have to judge conditions through the data available.
Rachel Reeves, Labour’s shadow chancellor, said of the growth figures: “Today’s results show our economy is still inching along this Tory path of managed decline.
“People will be asking themselves whether they feel better off under the Tories, and the answer will be no.”
UK car production fell by more than a quarter (27.1%) last month as a cyberattack at Jaguar Land Rover halted manufacturing at the plant, industry figures show.
The total number of vehicles coming off assembly lines – including cars and vans – fell an even sharper 35.9%, according to September data from the Society of Motor Manufacturers and Traders (SMMT).
“Largely responsible” for the drop was the five-week pause in production at Jaguar Land Rover (JLR) due to a malicious cyber attack, as other car makers reported growth.
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JLR’s assembly lines in the West Midlands and Halewood on Merseyside were paused from late August to early October as a result.
During this time, not a single vehicle was made. Production has since restarted, but the attack is believed to have been the “most financially damaging” in UK history at an estimated cost of £1.9bn, according to the security body the Cyber Monitoring Centre.
It was the lowest number of cars made in any September in the UK since 1952, including during the COVID-19 lockdown.
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Are we in a cyber attack ‘epidemic’?
Despite the restart, the sector remains “under immense pressure”, the SMMT’s chief executive Mike Hawes said.
The phased restart of operations led to a small boost in manufacturing output this month, according to a closely watched survey.
Of the cars that were made, nearly half (47.8%) were battery electric, plug-in hybrid or hybrid.
The vast majority, 76% of the total vehicles output, were made for export.
The top destinations are the European Union, US, Turkey, Japan and South Korea.
JLR was just the latest business to be the subject of a cyberattack.
Harrods, the Co-Op, and Marks and Spencer, are among the companies that have struggled in the past year with such attacks.
Championship club Sheffield Wednesday have filed for administration, according to a court filing, which will result in the already struggling side being hit with a 12-point deduction.
The South Yorkshire club currently sit bottom of the Championship, the second tier of English football, with just six points from 11 games.
Known as The Owls, Wednesday are one of the oldest surviving clubs in world football, with more than 150 years of history.
Court records confirm the club have filed for administration. A notice was filed at a specialist court at 10.01am.
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Sky’s Rob Harris reports on the news that Sheffield Wednesday have filed for administration
What has happened?
The Owls, who host Oxford United on Saturday, have been in turmoil for a long time.
On 3 June, owner Dejphon Chansiri, a Thai canned fish magnate who took over the club in 2015, was charged with breaching EFL regulations regarding payment obligations.
Sheffield Wednesday fans protest the ownership at a game away to Leeds United in January. Pic: Reuters
Weeks later, Mr Chansiri said he was willing to sell the club in a statement on their official website.
Sheffield Wednesday’s troubles have sparked furious protests from fans. Pic: PA
Their crisis deepened just days later when another embargo was imposed on the club relating to payments owed to HMRC, before players and staff were not paid on time on 30 June.
In the months that followed, forwards Josh Windass and Michael Smith left the club by mutual consent. Manager Danny Rohl, now at Rangers, also left by mutual consent.
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Frustrated Sheffield Wednesday supporters have targeted their embattled club’s owner in a highly-visible protest during their opening match of the season.
The Owls were forced to close the 9,255-capacity North Stand at Hillsborough after a Prohibition Notice was issued by Sheffield City Council.
‘Current uncertainty’
On 6 August, the EFL released a statement, saying: “We are clear that the current owner needs either to fund the club to meet its obligations or make good on his commitment to sell to a well-funded party, for fair market value – ending the current uncertainty and impasse.”
On 13 August, the Prohibition Notice was lifted, but a month later, news emerged of a winding-up petition over £1m owed to HMRC.
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Last season, Wednesday finished 12th. They had already been placed under registration embargoes in the last two seasons after being hit by a six-point deduction during the 2020/21 campaign, for breaching profit and sustainability rules.
With a 12-point deduction, the Owls would be 15 points away from safety in the Championship.
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