UK economic system shrank unexpectedly by 0.1% in January

The UK economic system shrank unexpectedly by 0.1% in January, with a slowdown in manufacturing one of many fundamental causes for the dip.

The efficiency was weaker than anticipated, and got here after the economic system had grown by 0.4% in December.

Will probably be seen as a blow to the federal government, which has stated its primary precedence is to spice up UK financial progress.

The figures come forward of the chancellor’s Spring Assertion, which is predicted to stipulate authorities spending cuts.

Liz McKeown, ONS director of financial statistics, stated: “The economic system shrank a bit in January however grew within the newest three months as an entire, with the general image persevering with to be of weak progress.”

Development and oil and gasoline extraction had a “weak month”, she stated.

However this was partially offset by retail, significantly meals outlets, “as folks ate and drank at residence extra”, she stated.

Chancellor Rachel Reeves stated: “The world has modified and throughout the globe we’re feeling the results.”

She added the federal government is “going additional and sooner” to “kickstart financial progress”.

Yael Selfin, chief economist at KPMG UK, stated the UK economic system had began the 12 months “on the again foot” as uncertainty about Trump tariffs was making companies cautious about funding.

She stated predictions of “sluggish progress” means Reeves will in all probability “tighten purse strings” within the Spring Assertion.

The current lower to UK support to fund a rise in defence spending “is a preview that some departments will see their spending plans squeezed”, she added.