UK economy shrinks by 0.1% ahead of Spring Statement
The UK economy shrank at the beginning of 2025, caused by a slump in the manufacturing sector.
According to figures from the Office for National Statistics (ONS), GDP fell by 0.1%, mainly due to a fall in the production sector, after growth of 0.4% in December 2024.
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.
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. Services grew by 0.4% over these three months, while production fell by 0.9% and construction grew by 0.4%.
Chancellor Rachel Reeves will deliver her Spring Statement on March 26, with her plans for the UK economy.
Liz McKeown, the ONS’ director of economic statistics said: “The economy shrank a little in January but grew in the latest three months as a whole, with the overall picture continuing to be of weak growth.
“The fall in January was driven by a notable slowdown in manufacturing, with oil and gas extraction and construction also having weak months.
“However, services continued to grow in January led by a strong month for retail, especially food stores, as people ate and drank at home more.”
The chancellor said of the ONS data: “The world has changed and across the globe we are feeling the consequences.
“That’s why we are going further and faster to protect our country, reform our public services and kickstart economic growth to deliver on our Plan for Change.
“And why we are launching the biggest sustained increase in defence spending since the Cold War, fundamentally reshaping the British state to deliver for working people and their families; and taking on the blockers to get Britain building again.”
