UK economy contracts unexpectedly in January by 0.1%

Britain's economic output contracted unexpectedly by 0.1% in January, pulled down by a sharp drop in manufacturing output compared with December, data from the Office for National Statistics showed on Friday.

A Reuters poll of economists had forecast a monthly expansion of 0.1%. While January's drop only partially reverses a 0.4% expansion in December, the reading nonetheless represents a disappointment for finance minister Rachel Reeves, whose number one mission is to get the economy growing.

Over the three months to January, the economy expanded by 0.2%, slightly weaker than the 0.3% Reuters poll consensus.


Manufacturing output slumped by 1.1% in January alone, with the metals and pharmaceutical sectors performing especially poorly, while the broader industrial sector was also hurt by a fall in oil and gas extraction.

Output in the dominant services sector grew by 0.1%, marking the third straight month-on-month expansion.

Construction output slipped by 0.2%, with the ONS citing anecdotal evidence from companies of stormy weather hitting construction activity.