Rachel Reeves today suffered a bodyblow with figures that deteriorate the economy.
GDP fell by 0.1 percent in January – defending expectations for a small increase – because production decreased despite the controversial urge from the Chancellor to growth.
Although the UK has postponed 0.2 percent expansion in the last three months, questions will raise with the threatening headwind of the massive budget national insurance attack and the trade war of Donald Trump.
Mrs. Reeves is already dealing with a struggle to balance the books and to generate the defense issues in the midst of the Ukraine crisis, where the spring declaration appears on March 26.
Reeves responded this morning to the gloomy findings and blamed a wider turbulence.
“The world has changed and we feel the consequences all over the world,” she said.
GDP fell by 0.1 percent in January when production dropped, despite the controversial urge of the Chancellor to growth
Rachel Reeves is already dealing with a struggle to balance the books and to generate the defense issues in the midst of the Ukraine crisis
Our Director of Economic Statistics Liz McKeown said: 'The economy crumbled a bit in January, but grew in the last three months as a whole, with the general image that remains of weak growth.
'The fall in January was powered by a remarkable delay in production, with oil and gas extraction and construction also weak months.
“However, the services continued to grow in January under the leadership of a strong month for retail, especially food stores, while people ate more and drunk.”
Shadow Chancellor Mel Stride urged Mrs. Reeves to 'think again' before the spring statement.
“It is no surprise that growth is falling again, after almost no growth in the last three months of 2024. After having consistently spoken in Great Britain, taxes has increased to register highlights and crushing companies with their extreme employment laws of this government,” he said.
“Labor inherited the fastest growing economy in the G7, but since they have arrived, the trust of the company has collapsed and jobs are lost.”
Suren Thiru, director of ICAEW Economics, said: 'These figures confirm a nerve -racking decrease in economic output during the January financial market turbulence, as a remarkably bad month for construction and manufacturers hindered the overall activity.
'The economic performance of the VK may have been downbeat in the same way in February, with some boost from consumer expenditure in the midst of strong wage growth and lower interest rates weakened by the brake on business activity from this stream of global uncertainty.
'This decline makes the upcoming spring declaration more problematic, because it strengthens the prospect of a remarkable downgrade to the growth reasons of the OBR, which further undermines the spending plans of the Chancellor.
“Despite these disappointing figures, a rate reduction appears to be unlikely next week because rate -setters will probably want to assess the impact of April's national insurance increase on inflation before another policy is sanctioned.”
Nicholas Hyett, investment manager at Wealth Club, warned of the risk that 'recession will start here'.
“Rates and increased labor costs were more worries than the reality in January, the month that falls under these figures,” he said.
'Those worries will soon transform into realities. This leaves a lot of room for economic growth to deteriorate further, with far fewer catalysts to generate an economic recovery. We could be in a recession at the start of a long slow slide. ”
