LONDON (Reuters) - The economy rebounded strongly last month after its unexpected weather-related contraction in December, the National Institute of Economic and Social Research estimated on Thursday.
NIESR, an academic forecasting body, calculated that gross domestic product grew by 0.6 percent on the month in January. Private-sector surveys have also pointed to a rapid rebound from the coldest December in 100 years.
“Care should be taken when interpreting the figures since they are distorted by the impact of the adverse weather at the end of last year,” NIESR said. “The underlying level of GDP appears relatively flat over the last few months.”
In the three months to January, output fell 0.1 percent compared to a 0.5 percent decline in the three months to December — a reading which shocked most economists when it was released last month.
This contraction meant that the amount of spare capacity in Britain’s economy was on the rise again, and that total output levels remained more than 4 percent below their pre-recession peak, NIESR said.
NIESR says its quarterly growth forecasts are usually within 0.2 percentage points of the Office for National Statistics’ initial estimate — though NIESR, like most forecasters, failed to predict Q4’s economic contraction. (Reporting by David Milliken; Editing by Toby Chopra)