Britain’s economy unexpectedly contracted in early 2025, adding to pressure on the Labour government for a lack of momentum since it returned to power last summer.
Gross domestic product fell 0.1 per cent in January due to declines in manufacturing and construction, the Office for National Statistics said on Friday. Economists had expected growth of 0.1 per cent. That means GDP is still barely higher than when Labour won a convincing election victory in July.
The figures will increase pressure on Chancellor Rachel Reeves, who must start to fulfil her promise to boost economic growth as she prepares to announce what is expected to be a sobering economic report on March 26.
While economists are predicting a return to robust growth this year, risks to the outlook are growing due to Donald Trump’s escalating trade war, which is sending stocks tumbling and raising fears of a global slowdown. There are hopes that the UK’s plans for major infrastructure spending will boost growth.
