UK Economy Contracts by 0.1% in January, Surprising Analysts

A decline in manufacturing output and construction drives the unexpected contraction, adding pressure on the Labour government ahead of the spring statement.

The UK's GDP shrank by 0.1% in January, reversing December's 0.4% growth, according to the Office for National Statistics (ONS).
The contraction was driven by a 1.1% drop in manufacturing output and a 0.2% decline in construction, while the services sector saw marginal growth of 0.1%.
Economists had forecast 0.1% growth for January, making the decline a surprise and underlining ongoing economic fragility.
Chancellor Rachel Reeves faces mounting challenges ahead of the March 26 spring statement, with potential spending cuts and downgraded growth forecasts looming.
Global factors, including Donald Trump's new tariffs and ongoing trade uncertainties, are compounding domestic economic pressures.