UK economic growth remains sluggish

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The UK economy grew by 0.2% in the three months to January, matching the growth of the previous three months.

The report from the Office for National Statistics (ONS) showed a pick-up in activity in January when the economy expanded by 0.5%.

The ONS said strength in IT, health services and wholesale trading offset falls in the manufacturing of metals and cars, and construction repair work.

The increase in wholesale could indicate stockpiling ahead of Brexit.

However, the ONS was unable to comment on whether the rise was linked to UK manufacturers stockpiling.

The services sector, which accounts for about 80% of the private sector economy, grew by 0.3% in January after a 0.2% fall in December.

The rolling three-month growth in the services sector was 0.5%, mainly driven by wholesale and retail trade.

Construction, which accounts for about 6% of the economy, reversed its fall in December to grow by 2.8% in January.

Andrew Wishart, UK economist with Capital Economics, said the numbers provided some reassurance that the UK economy is weathering a political crisis at home and a slowdown overseas “pretty well”.

He said there was “little evidence” of stockbuilding, with output in the transport and storage sector falling in January and the three-month growth in imports easing off.

“Of course, the data may deteriorate in February and March if Brexit has caused consumers and firms to reach for the handbrake,” he added.

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