The UK’s economic output declined by 0.1% in January compared to December, driven by a sharp drop in manufacturing, according to data released by the Office for National Statistics (ONS)

today. Economists polled by Reuters had anticipated a 0.1% increase, making the contraction an unexpected setback.

While the dip only partially offsets December’s 0.4% expansion, it poses a challenge for finance minister Rachel Reeves, who has prioritized economic growth.

Over the three months to January, GDP grew by 0.2%, slightly below the 0.3% forecasted by economists.

Manufacturing output saw a significant decline of 1.1%, particularly in the metals and pharmaceutical industries. The broader industrial sector also struggled due to a drop in oil and gas extraction.

In contrast, the UK’s dominant services sector expanded by 0.1%, marking its third consecutive month of growth.

Meanwhile, construction output fell by 0.2%, with the ONS attributing the decline to stormy weather disrupting activity. Photo by Philippe Salgarolo, Wikimedia commons.