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IoD press release Signs of economic green shoots, but still a strong case for an interest rate cut.

Commenting on ONS data that showed monthly GDP rising by 0.2% in January 2024, following a fall of 0.1% in December 2023., Dr. Roger Barker, Director of Policy at the Institute of Directors, said:

“It is encouraging to see the UK economy returning to growth at the start of 2024 – after having been technically in recession at the end of 2023.

“Last week, the OBR forecast growth of 0.8% for 2024 as a whole. Although it is early days, January’s growth figure is consistent with achieving that kind of outcome.

“The latest figures show a bounce back in the retail sector, with retail output up 3.4% on the month, similar to the growth recorded in January’s figures for retail sales. This is an encouraging green shoot, given the weakness of the retail sector over the Christmas period.

“Interestingly, the professional services sector appears to be experiencing some weakness at the current time, with output in areas like legal and accounting services, and consultancy, registering material declines.

“Despite a positive start to the year, the UK economy remains in a relatively fragile position. The case for an early cut in interest rates by the Bank of England is still a strong one.”

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