The UK economy contracted by 0.1% in January.



London - The UK's Office for National Statistics said the UK economy contracted by 0.1% in January. This disappoints experts' expectations of a move in the opposite direction, as they had predicted a 0.1% growth.

Data from the Office for National Statistics showed that the industrial sector led the contraction, declining by 1.1%. Construction, hospitality and leisure, and oil extraction also slowed in the same month, while the services sector grew by 0.1%.

Uncertainty prevails among UK businesses due to Treasury Chancellor Rachel Reeves' domestic policies, US President Donald Trump's trade policies regarding tariffs, and the global turmoil and uncertainty that are overwhelming markets.

Reeves faces widespread criticism for her policies, which have been described as "growth-killing." The Chancellor is seeking to restrict spending, increase National Insurance for businesses next April, and raise the minimum wage, all of which will force businesses to limit their spending, investments, and economic activity.

On the other hand, the repeated reluctance to implement US tariffs has become a major concern for companies in the European Union and countries targeted by Trump's policies.

The cold weather also caused a decline in the construction sector in particular, as the significantly lower temperatures restricted construction operations.

It is noteworthy that the Bank of England and the British Institute of Economic and Social Research have lowered their forecasts for economic growth in the first quarter of this year to 0.1% and 0.3%, respectively.

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