UK Economy Contracts by 0.1% in January as Manufacturing and Construction Decline

The unexpected GDP drop raises concerns over domestic tax policies and global trade tensions ahead of the Spring Statement.

The UK's GDP shrank by 0.1% in January, driven by a 0.9% decline in production, including a 1.1% drop in manufacturing output and a 0.2% fall in construction.
The services sector showed marginal growth of 0.1%, supported by retail gains, but consumer-facing industries like hospitality struggled.
Chancellor Rachel Reeves faces criticism for a £26bn employer tax hike, which has dampened private sector confidence and hiring activity.
Global economic uncertainty, exacerbated by Donald Trump’s escalating trade war and market corrections, is adding pressure on the UK economy.
Economists warn of potential stagnation, with businesses and consumers cautious amidst rising costs and looming tax increases in April.