Economy rebounds in January

Survey data out this week showed the UK economy rebounded in January, exceeding expectation.

Today’s Purchasing Managers' Index of the services sector from Markit/CIPS was much stronger than expected, hitting an eight month high last month.

This followed strong data from the construction industry on Wednesday, while Monday’s manufacturing sector data saw new orders and employment accelerate at their highest rate in the survey’s nineteen year history.

Michael Saunders, economist at Citigroup, said: "The sharp rebound in the services PMI, along with the other PMIs, suggests that the economy’s underlying path is nothing like as weak as shown by the Q4 GDP data."