The UK economy contracted by 0.1 per cent for January 2025 a blow to Chancellor Rachel Reeves, according to the latest figures from the Office for National Statistics (ONS).
Reeves has pledged to “kickstart the economy” with the fiscal policies outlined in her Autumn Budget and upcoming Spring Statement but she has received backlash from the business community over her tax changes.
This shrinking of the economy comes as a surprise to City economists, who expected gross domestic product (GDP) growth to jump by 0.1 per cent over the period.
ONS data revealed the services sector was unable to offset a decline in the industrial sector and maintain growth from the previous month.
As a result of these figures, the UK inches closer to recession territory, which happens when a country experiences two consecutive quarters of negative economic growth.
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