Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of, and growth in the economy.
The rebound follows a 0.5 per cent fall in December 2022, the Office for National Statistics (ONS) revealed.
It said the largest contributors to growth came from education, transport, human health activities, as well as arts, entertainment and recreation activities.
The ONS noted that education grew 2.5 per cent as school attendance levels returned to normal after a significant drop in December.
Meanwhile, there was a 6.4 per cent increase in postal and courier activities, following a 10.4 per cent slump in December due to the impact of postal strikes.
Elsewhere, arts, entertainment and recreation grew by 3.4 per cent in January 2023, helped by the return of a full schedule for Premier League football after fixtures were postponed in December 2022 for the FIFA World Cup.
But on the flip side, production output fell 0.3 per cent, construction fell 1.7 per cent and real estate activities declined 0.1 per cent.
Overall, the broader picture of GDP over the quarter remained flat.
Recession fears still real
According to Ruth Gregory, deputy chief UK economist at Capital Economics, the 0.3 per cent rise in real GDP in January raises hopes that the economy will escape a recession in 2023.
It will also increase calls for the Chancellor to “splash the cash” in his Spring Budget next Wednesday.
“But the rise in GDP is not as good as it seems so we doubt it will give the Chancellor much wiggle room. And with the full drag from high interest rates yet to be felt, our hunch is still that the economy will enter a recession later this year,” Gregory said.
