UK Economy Shrinks by 0.1% in January

The UK economy shrank unexpectedly in January, in a blow to the government ahead of its Spring Statement later this month.

According to BBC reports the economy contracted by 0.1 per cent, which was weaker than forecast, driven mainly by a decline in the manufacturing sector.

The government has made boosting growth its key priority, but a weaker economy is expected to affect Chancellor Rachel Reeves’s decisions as she seeks to meet her self-imposed rules on tax and spending.

Reeves said the government needed to go further and faster on the economy, but the Conservatives accused it of being a growth killer.

The contraction in January came after 0.4 per cent growth in December.

Monthly readings can be volatile, and the ONS said the economy was estimated to have grown by 0.2 per cent over the three months to January.

But, according to the ONS, the overall picture for the economy was one of weak growth.