GDP down by 0.1% after services fail to plug the gap

The UK economy contracted by 0.1% in January, dealing a blow to Rachel Reeves before the spring statement later this month.

- Phillip Inman

In a surprise to City economists, who had expected 0.1% growth in January, the Office for National Statistics data showed the services sector failed to offset a decline in the industrial sector and maintain growth from the previous month.

Manufacturing output fell by 1.1% in January 2025, reversing a spurt of 0.7% in December. Construction was another drag on the economy after poor winter weather held back housebuilders.

Services increased by only 0.1%, with falls in hospitality and arts and entertainment making the biggest dent in growth.