London Daily

Focus on the big picture.
Monday, Nov 24, 2025

Return to school unexpectedly boosts UK economy in January

Return to school unexpectedly boosts UK economy in January

Children returning to school after an illness-ravaged December provided an unexpected, one-off boost to Britain's economy in January, when growth in output exceeded forecasts, data showed on Friday.

The Office for National Statistics (ONS) said Britain's economy expanded 0.3% month-on-month, after a drop of 0.5% in December - a reading that is likely to further allay recession fears, at least in the short term.

A Reuters poll of economists had pointed to growth of 0.1%.

The pound rose against the dollar and euro on the back of the figures, which showed growth was powered entirely by services - much of it due to the one-off bounce in the education sector.

The entertainment sector - helped by the men's soccer Premier League returning to action after the 2022 World Cup - was another fillip for the economy.

In a sign of deeper problems for the economy, manufacturing and construction contracted.

"Looking beneath the surface, the figures suggest the economy is on weaker ground than it appears," Ruth Gregory, deputy chief UK economist at consultancy Capital Economics.

Martin Beck, chief economic advisor to the EY ITEM Club forecasting group, said widespread strikes in December and January likely explained why the economy remained below its level in November.

The ONS said economic output in January stood 0.2% below its pre-pandemic level of February 2020 - in contrast to other advanced economies - and had shown zero growth over the last three months and the past year.

Friday's data are unlikely to materially change the debate at the Bank of England as it weighs up whether to raise interest rates again at its March meeting.

The chance of a 25 percentage point increase in Bank Rate on March 23 receded slightly on Friday to about 83%, according to financial market pricing, from 100% earlier this week.

CLASSROOM ECONOMICS

Prime Minister Rishi Sunak said the fundamentals of Britain's economy were strong, adding that his finance minister Jeremy Hunt would announce more details about the government's economic plans in his upcoming annual budget.

Hunt looks set to keep his grip on the public finances in Wednesday's budget, refraining from big tax cuts or spending increases until the next election comes closer into view.

The opposition Labour Party, ahead of Sunak's Conservatives in the opinion polls by a wide margin, said the data showed the economy was only "inching along" amid a wider trend of managed decline.

The ONS said half of the 0.3% growth rate comprised the education sector, as a result of children returning to school after a significant drop in attendance in December.

The government had previously reported high rates of flu and scarlet fever during December. Fear of contracting COVID-19 over Christmas may also have contributed to children being taken out of school early.

Education represents 6% of Britain's economy and student numbers are the main way the ONS measures the quantity of service the sector provides.


Newsletter

Related Articles

0:00
0:00
Close
UK Unveils Critical-Minerals Strategy to Break China Supply-Chain Grip
Taylor Swift’s “The Fate of Ophelia” Extends U.K. No. 1 Run to Five Weeks
UK VPN Sign-Ups Surge by Over 1,400 % as Age-Verification Law Takes Effect
Former MEP Nathan Gill Jailed for Over Ten Years After Taking Pro-Russia Bribes
Majority of UK Entrepreneurs Regard Government as ‘Anti-Business’, Survey Shows
UK’s Starmer and US President Trump Align as Geneva Talks Probe Ukraine Peace Plan
UK Prime Minister Signals Former Prince Andrew Should Testify to US Epstein Inquiry
Royal Navy Deploys HMS Severn to Shadow Russian Corvette and Tanker Off UK Coast
China’s Wedding Boom: Nightclubs, Mountains and a Demographic Reset
Fugees Founding Member Pras Michel Sentenced to 14 Years in High-Profile US Foreign Influence Case
WhatsApp’s Unexpected Rise Reshapes American Messaging Habits
United States: Judge Dressed Up as Elvis During Hearings – and Was Forced to Resign
Johnson Blasts ‘Incoherent’ Covid Inquiry Findings Amid Report’s Harsh Critique of His Government
Lord Rothermere Secures £500 Million Deal to Acquire Telegraph Titles
Maduro Tightens Security Measures as U.S. Strike Threat Intensifies
U.S. Envoys Deliver Ultimatum to Ukraine: Sign Peace Deal by Thursday or Risk Losing American Support
Zelenskyy Signals Progress Toward Ending the War: ‘One of the Hardest Moments in History’ (end of his business model?)
U.S. Issues Alert Declaring Venezuelan Airspace a Hazard Due to Escalating Security Conditions
The U.S. State Department Announces That Mass Migration Constitutes an Existential Threat to Western Civilization and Undermines the Stability of Key American Allies
Students Challenge AI-Driven Teaching at University of Staffordshire
Pikeville Medical Center Partners with UK’s Golisano Children’s Network to Expand Pediatric Care
Germany, France and UK Confirm Full Support for Ukraine in US-Backed Security Plan
UK Low-Traffic Neighbourhoods Face Rising Backlash as Pandemic Schemes Unravel
UK Records Coldest Night of Autumn as Sub-Zero Conditions Sweep the Country
UK at Risk of Losing International Doctors as Workforce Exodus Grows, Regulator Warns
ASU Launches ASU London, Extending Its Innovation Brand to the UK Education Market
UK Prime Minister Keir Starmer to Visit China in January as Diplomatic Reset Accelerates
Google Launches Voluntary Buyouts for UK Staff Amid AI-Driven Company Realignment
UK braces for freezing snap as snow and ice warnings escalate
Majority of UK Novelists Fear AI Could Displace Their Work, Cambridge Study Finds
UK's Carrier Strike Group Achieves Full Operational Capability During NATO Drill in Mediterranean
Trump and Mamdani to Meet at the White House: “The Communist Asked”
Nvidia Again Beats Forecasts, Shares Jump in After-Hours Trading
Wintry Conditions Persist Along UK Coasts After Up to Seven Centimetres of Snow
UK Inflation Eases to 3.6 % in October, Opening Door for Rate Cut
UK Accelerates Munitions Factory Build-Out to Reinforce Warfighting Readiness
UK Consumer Optimism Plunges Ahead of November Budget
A Decade of Innovation Stagnation at Apple: The Cook Era Critique
Caribbean Reparations Commission Seeks ‘Mutually Beneficial’ Justice from UK
EU Insists UK Must Contribute Financially for Access to Electricity Market and Broader Ties
UK to Outlaw Live-Event Ticket Resales Above Face Value
President Donald Trump Hosts Saudi Crown Prince Mohammed bin Salman at White House to Seal Major Defence and Investment Deals
German Entertainment Icons Alice and Ellen Kessler Die Together at Age 89
UK Unveils Sweeping Asylum Reforms with 20-Year Settlement Wait and Conditional Status
UK Orders Twitter Hacker to Repay £4.1 Million Following 2020 High-Profile Breach
Popeyes UK Eyes Century Mark as Fried-Chicken Chain Accelerates Roll-out
Two-thirds of UK nurses report working while unwell amid staffing crisis
Britain to Reform Human-Rights Laws in Sweeping Asylum Policy Overhaul
Nearly Half of Job Losses Under Labour Government Affect UK Youth
UK Chancellor Reeves Eyes High-Value Home Levy in Budget to Raise Tens of Billions
×