Fri, 14 Mar 2025

Fri, 14 Mar 2025 UK economy shrank unexpectedly in January

A slowdown in manufacturing was one of the main reasons for the dip, the Office for National Statistics says.

* The UK economy shrank by 0.1% in January, a weaker-than-expected performance.
* The decline was driven mainly by a fall in the manufacturing sector.
* Economists had predicted a growth of 0.1% in January, after a 0.4% increase in December.
* Despite this, the economy is estimated to have grown by 0.2% over the three months to January.
* The overall picture for the UK is one of weak growth, with construction and oil and gas extraction experiencing a weak month, partially offset by retail.
* Businesses warn that tax rises from April could affect economic growth, as employers will have less cash to give pay rises and create new jobs.
* Firms are also facing uncertainty surrounding tariffs imposed by US President Donald Trump.
* The government is under pressure to increase defence spending, which may require cuts to other public spending plans.
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