Economy contracts by 0.1% in January

Monthly real gross domestic product (GDP) is estimated to have fallen by 0.1% in January 2025, mainly caused by a fall in the production sector, after growth of 0.4% in December 2024.

Real GDP is estimated to have grown by 0.2% in the three months to January 2025, compared with the three months to October 2024, mainly because of growth in the services sector.

At the sector level, monthly services output grew by 0.1% in January 2025, following growth of 0.4% in December 2024, and grew by 0.4% in the three months to January 2025; production output fell by 0.9% in January 2025, following growth of 0.5% in December 2024, and fell by 0.9% in the three months to January 2025, with manufacturing output driving both the monthly and three-month falls; and construction output fell by 0.2% in January 2025, following a fall of 0.2% in December 2024, but grew by 0.4% in the three months to January 2025.

Newspage asked experts and business owners, their views are below.

Harry Mills, Director at Oku Markets said, “This, without a doubt, is terrible news for the Chancellor ahead of her tax-grabbing raid on British business next month and the small matter of her Spring Statement on the 26th, when she will have to face the music. This will be an economic tune that she has herself conducted, in addition to updated OBR forecasts.”

Gabriel McKeown, Head of Macroeconomics at Sad Rabbit said, “The idea that Britain’s economy is powering ahead is more wishful thinking than economic reality, as the country struggles to move beyond stagnation with weak growth and waning business confidence.

“The data reveals a notable divergence across industries, with the production sector showing clear signs of strain, which could be the start of a protracted downturn without policy intervention.

“Of course a minor slip in January is not the same as a precipitous fall, however the UK economy cannot afford complacency, and the real reckoning is expected in April, when Labour’s fiscal policy kicks in which could push the UK into an even deeper economic malaise. Currently confidence in the economy plummeting as the true cost of the Government’s anti-growth policies are made clear, so without a serious reversal in policy objectives in the next budget, this could be just the beginning of a serious downturn in the British economy.”

David Belle, Trader at Fink Money said, “The Labour Party is turning us into a failed state. Recession is coming thick and fast and we should be in one by the end of the year. Well done Labour.”

Riz Malik, Independent Financial Adviser at R3 Wealth added, “More data to suggest the UK is in trouble with the production sector showing a big decline.

“There is no credible plan to save UK plc apart from hopes and prayers. With the budget changes shortly due to come in force and Trumps desire to crash the economy, the outlook is bleak.”