BUSINESS LIVE: GDP returns to growth; Metro Bank’s losses are declining; The Gym Group is planning more site launches

Metro Bank’s losses narrowed last year, supported by its cost-cutting efforts and as outflows stabilized towards the end of the year after an eleventh-hour capital injection.

The lender, which was founded in 2010 to challenge the dominance of Britain’s big banks, reported an underlying pre-tax loss of £16.9 million, compared with a loss of £50.6 million last year.

Boss Daniel Frumkin said:

“Looking ahead, I remain confident in our ability to be the number one community bank.

‘The work we have undertaken this year has paved the way to become a structurally profitable business and our focus on the SME, commercial and specialist mortgage sectors presents an exciting opportunity in an underserved part of the market.

“I remain grateful for the continued support of our colleagues, customers and shareholders as we embark on the next chapter of our journey.”

Starling Bank has poached the CEO of energy supplier Ovo as the group considers a stock exchange listing.

The disruptive bank said Raman Bhatia, 45, who previously led HSBC’s digital bank in the UK and Europe, would take over from interim chief executive John Mountain in the summer, subject to regulatory approval.

Jeremy Batstone-Carr, European Strategist at Raymond James Investment Services:

‘This economic rebound has been driven by a recovery in retail sales, and forward-looking indicators confirm that the economy will continue to thrive in the coming months.

“The recovery of the retail sector has proven to be sufficient to offset the stagnation in other parts of the economy, particularly industrial and industrial production. The retail industry has also countered strikes by trainee doctors and railway workers, dampening activity in the transport and healthcare sectors.

‘More encouragingly, the Bank of England’s cautious forecast for growth of 0.1% in the first quarter of 2024 is on course to be exceeded. Nevertheless, continued evidence of inflationary pressures is likely to deter rate setters from cutting borrowing costs now.”

Tom Stevenson, investment director at Fidelity International:

‘The short and superficial recession in Britain may already be over. GDP growth was 0.2% in January, as expected, driven by a stronger services sector.

‘Despite the return to growth, there was still a modest contraction in the three months of November to January compared to the three months before. Together with yesterday’s rise in unemployment and slowing wage growth, this shows that the British economy is not yet out of the woods.

‘The Bank of England is likely to sit idle for the first half of the year, waiting for a clearer picture of where growth and inflation are heading.

‘However, the recovery from the superficial recession in the second half of 2023 builds on the more positive tone of the Office for Budget Responsibility, which last week increased its growth forecasts to 0.8% for 2024 and 1.9% in 2025.

‘The improving outlook for the UK economy is likely to lead to a positive shift in sentiment towards the UK stock market, which has lagged international peers during the sharp recovery from last autumn’s trough.’

The UK economy returned to growth in January, with GDP rising 0.2 percent this month, after falling into recession in the final quarter of 2023, according to new data from the Office for National Statistics.