The UK economy continued to grow in February, boosting hopes that it is escaping recession. GDP expanded by 0.1% in February, data from the Office for National Statistics (ONS) shows, lifted by growth in the production and services sectors. The ONS has lifted its forecast for January, to show 0.3% growth, up from 0.2% previously estimated. This suggests the economy may manage to grow in the first quarter of 2024. That would mean the short, shallow recession that began at the end of 2023 will officially end. Liz McKeown, an ONS director of economic statistics, said: "The economy grew slightly in February with widespread growth across manufacturing, particularly in the car sector. Services also grew a little with public transport and haulage, and telecommunications having strong months. “Partially offsetting this there were notable falls across construction as the wet weather hampered many building projects. “Looking across the last three months as a whole, the economy grew for the first time since last summer.” Britain’s industrial sector was the largest contributor to growth in February. Today’s GDP report shows that production output grew by 1.1% in February, more than reversing a 0.3% drop in January. Manufacturing output rose by 1.2%, driven by a surge in manufacturing of transport equipment such as cars. The services sector had a calmer month – it grew by 0.1% in February, slower than the 0.3% growth in January. It was a month to forget for builders, with construction output falling by 1.9% in February. The ONS cites “anecdotal evidence” that heavy rainfall delayed planned work, decreasing output in February. Even if the economy is growing again, households are still struggling. Half of consumers have cut back on their non-essential spending so far this year, with eating out the most likely thing to be cut from budgets, a survey this morning shows. Only 3% of consumers say that they have been able to spend more on non-essentials in the first quarter, with 52% cutting back, according to the KPMG Consumer Pulse survey. Eating out was the most common discretionary spending cut, listed by 72% of those who are scaling back, followed by clothing purchases (62%) and takeaways (58%). The agenda • Noon BST: Bank of England to publish review of its forecasting models • 1pm BST: India’s inflation rate for March • 3pm BST: University of Michigan’s index of US consumer confidence We’ll be tracking all the main events throughout the day ...
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