UK industrial production rose 0.5% in December month-on-month, leading some experts to suggest a double-dip recession could be avoided.
Speaking about the latest snapshot of the domestic economy from the Office for National Statistics (ONS), Chris Williamson of research group Markit said: "The improvement in manufacturing meant the rate of decline over the three months to December – a more reliable guide to the underlying health of the sector – eased from 1.0% to 0.8%, the weakest decline for three months.
"This tallies with data from the Markit/CIPS PMI survey, which showed a similar easing in December, but encouragingly also showed a resounding return to growth in January.
"It is therefore reassuring to see the official data following the trend in the business surveys and adding weight to the likelihood that the economy will recover in the first quarter from a brief contraction seen in the final quarter of last year," he added.
Williamson said the 0.2% dip in GDP in the final quarter of 2011 could be offset by stronger service sector growth, resulting in economic stagnation rather than decline.
Other figures released by the ONS showed the UK's trade deficit was £1.1bn in December, compared with £2.8bn in November, and the smallest deficit for nearly a decade.
Goods exports rose nearly 4% in December, the strongest performance since last March, the ONS said.
Meanwhile the Bank of England announced it is pumping a further £50bn into the economy, taking its total quantitative easing programme to £325bn.
The Bank revealed details of the extra funding as it held base interest rates at 0.5%, the same level since March 2009, for yet another month.
