UK economic growth bounced back in January as the effects of the Omicron coronavirus variant began to ease, official figures show.
The economy grew by 0.8% compared with a 0.2% fall in December the Office for National Statistics said.
But despite the rebound in January, economists warned that the UK could be facing recession due to economic shocks including Russia’s invasion of Ukraine.
Chancellor Rishi Sunak said it was creating economic uncertainty.
Wholesaling, retailing, restaurants and takeaways all performed well, according to the official figures.
While supply chain issues continued to dog some sectors, construction and manufacturing both grew, the ONS added.
Computer programming and film and TV production also had a good start to the year, said Darren Morgan, ONS director of economic statistics.
“GDP bounced back from the hit it took in December due to the Omicron wave and is now 0.8% above its pre-pandemic peak,” he said.
“All sectors grew in January with some industries that were hit particularly hard in December now performing well.”
What is GDP and how does it affect me?
Despite the rebound, Chancellor Rishi Sunak was cautious on the prospects for the UK economy.
UK households were already facing sharply rising costs before Russia’s invasion of Ukraine, in part due to soaring energy costs.
Mr Sunak said that Russia’s invasion “is creating significant economic uncertainty”, but “it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy and ensure Putin fails”.
He added that the government had “provided unprecedented support” throughout the Covid pandemic, “which has put our economy in a strong position to deal with current cost of living challenges”.
Despite the stronger-than-expected growth in January, the British Chambers of Commerce (BCC) warned there was a risk that the UK could be heading for a recession.
Suren Thiru, the BCC’s head of economics, said: “While there was a strong rebound in output in January as the impact of Omicron started to ease, the figures have been pushed into the rear-view mirror by renewed domestic and global shocks, including Russia’s invasion of Ukraine.
“The UK’s economy could stall in the near term as rising inflation, soaring energy bills and higher taxes increasingly drag on activity, despite a probable boost to output in February from the end of Plan B Covid restrictions.”
He said the invasion of Ukraine had pushed up the risk of a UK recession because it was making the cost of living crisis worse, and “derailing the supply of critical commodities to many sectors of the economy”.
Kitty Ussher, chief economist at the Institute of Directors, said that the key question facing the UK economy was whether people who have enough cash to be able to choose how to spend some of it would be “more pleased about the retreat of the virus than they are concerned about the financial impact of the grim news from Ukraine ”.