The British economy rebounded strongly in January; Evraz directors resign after Abramovich sanction – Live Business | Business
Hello and welcome to our ongoing coverage of the global economy, financial markets, eurozone and business.
The UK economy returned to growth as the economic damage caused by the Omicron variant receded.
UK GDP rose 0.8% in January, faster than economists expected, after contracting 0.2% in December when ‘plan B’ restrictions were introduced after the emergence of the fast-spreading variant of Covid-19.
New figures from the Office for National Statistics show that every sector grew in January, with services up 0.8%, production up 0.7% and construction up 1.1%.
Service companies in direct contact with customers have experienced a strong recovery. The food and beverage sector rose 6.8% in January after the festive season was severely disrupted as parties were canceled and more people worked from home in December.
The January rebound means the UK economy was 0.8% above pre-pandemic levels:
However, Russia’s invasion of Ukraine now threatens the recovery, with the International Monetary Fund likely to lower its global growth forecasts.
Chief Executive Kristalina Georgieva told reporters last night that the unprecedented sanctions imposed on Russia were pushing the Russian economy into a deep recession.
The crisis is also having global repercussions: it is driving up commodity prices, leading to higher inflation which is hitting real incomes and hurting financial conditions and business confidence.
So, to sum up, we have a tragic impact of the war on Ukraine. We have a major contraction in Russia. And we see the likely impact on our Global Economic Outlook. Next month we will present a downward revision of our growth projections.
So we went through a crisis like no other with the pandemic. And we are now in even more shocking territory. The unthinkable has happened: we have a war in Europe.
In January, the IMF predicted the global economy would grow 4.4% this year, down from 5.9% in 2021.
US President Joe Biden expected to increase economic pressure on Vladimir Putin later in the day calling for an end to normal trade relations with Russia, according to reports.
The move, reported by Reuters and Bloomberg citing unnamed Biden administration sources, would pave the way for higher tariffs on Russian imports and come on top of widespread sanctions and a decision this week to ban oil imports from Russia by the United States and the United Kingdom.
- 7am GMT: UK GDP and trade report for January
- Noon GMT: Brazil inflation rate for February
- 15:00 GMT: University of Michigan survey of US consumer sentiment for March