LONDON- Britain's economy showed tentative signs of picking up last week as a wave of coronavirus cases driven by the Omicron variant eased, after businesses suffered a widespread fall in turnover during December.

Tax data released on Thursday showed a 6 percentage-point gap last month between the proportion of firms reporting falling sales and the proportion reporting a rise - the biggest net fall since April 2020 near the start of the pandemic.

Economists have forecast Britain's economy may lose around half a percent of output over December and January due to the COVID-19 surge, which led to widespread staff absences and prompted many people to limit socialising.

Britain's economy is being watched closely as an international test case after Prime Minister Boris Johnson ordered relatively light restrictions in December to slow Omicron's spread.

After a recent halving of COVID cases from a peak in early January, Johnson on Wednesday suspended advice for people in England to work from home where possible.*:nL8N2TZ2FY

The world's fifth-biggest economy only regained its pre-pandemic size in November, after output fell as much as 25% at the start of pandemic when the country went into lockdown. 

Business surveys have shown a big hit to activity in December, especially for hospitality and beauty businesses, as many customers stayed home even in the absence of legal restrictions in most of the United Kingdom. 

But there are signs that a slump in the number of diners started to reverse last week.

Restaurant reservations in the week to Jan. 17 were 93% of their level in the equivalent week before the pandemic, up from 88% the week before although still well below the 134% recorded in the week to Jan. 2.

Transactions at the Pret A Manger cafe chain - whose branches are mostly in central London - rose by 16 percentage points in the week to Jan. 13 to 72% of their level in January 2020, though sales were well below late 2021 levels.

Consumer spending on credit and debit cards also increased to 85% of its level in February 2020 in the week to Jan. 13 from 82% the week before - although these numbers are harder to interpret as they are not seasonally adjusted.

The figures were published on Thursday by the Office for National Statistics, as part of a weekly round-up of data from the Bank of England and businesses including restaurant reservations website OpenTable.

(Reporting by David Milliken Editing by William Schomberg) ((; +44 20 7513 4034;))