In January, the UK economy unexpectedly concluded by 0.1%

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In January, the UK economy unexpectedly concluded 0.1 percent, emphasizing the challenge facing Rachel’s Chancellor when she was preparing to make a spring statement this month.

Monthly Friday GDP The drawing from the National Statistics Office was below both 0.1 percent growth, predicted economists, Reuters, and 0.4 percent of December. The decrease is largely due to weakness in the production sector.

Reeves preparing for Make public expenses In her spring statement on March 26, after a frustration of growth and higher borrowing costs, the government caused fears that it was going on the way to break its financial rules.

Growth largely stopped from May by suffering tax revenues after UK economy He jumped off the technical recession in the early 2024.

Labor deputies and some cabinet ministers have expressed concern that Reiviz plans to damage the cuts politically to alleviate the pressure on state finances, including the reduction of the well -being budget.

“This is the hardest thing we had to do,” said one ally of the chancellor. However, Riviz turned off, rewriting her financial rules to allow more borrowing, causing her to do what she called “a tough choice.”

Mel Stray, Chancellor Shadow, called for Riva to turn the statement on March 26 into an “emergency budget”, including the abolition of business tax and refusal to say “extreme employment legislation”.

The budgetary responsibility department in October predicts economic growth for 2025 by 2 percent – double to double 1 percent, predicted by economists interviewed by Reuters. Watchdog is expected to release a new forecast with the spring statement.

Surien Tira, director of the economics of the Institute of Co -Councils, said that in January, GDP made a spring statement “more problematic”, as it increased the likelihood that OBR lowers its forecasts, “further blowing up the Chancellor expenses.”

Pound after the release of data on Friday slightly weakened, which is 0.2 percent to the dollar of $ 1.292. In the morning trading Gilts reached minor income, pushing a 10-year profitability of 0.02 percentage points to 4.67 percent.

The figures come when Donald Trump’s final speeches have added to the UK’s economic tension, as well as the prospect of raising defense costs because the US president violates Western security alliances.

“The world has changed and we feel the consequences all over the world,” Reivz said in response to Friday’s numbers.

As a result, she said: “We are launching the greatest stable increase in defense costs after the Cold War, fundamentally removing the British state to deliver to the workers and their families, and to take over blockers to build Britain again.”

The Labor Party won the GP in July last July with a promise to start growth, but Riviz faced criticism about its October budget, which left the enterprises that carry the main content of £ 40 billion.

Enterprises have warned of job reduction as a result of measures that come into force since April.

Paul Dals, an economist of the consulting capital, said the fall in the production “emphasizes the weakness of the economy to the complete impact of taxes for business and feels uncertain global background.”

The Bank of England is expected to keep rates at 4.5 percent at its meeting next week against the background of the signs of the inflation. Last month, the Central Bank reduced the economic growth forecast for the first quarter from 2025 to 0.1 percent, from 0.4 percent expected in November.

Despite the reduction of January, Tira said that next week, the rates reduced to BOE are “unlikely” because the rates probably would like to evaluate the impact of employers’ national insurance.

On Friday, the data attached the expectations of the traders that this year will be at least two in a quarterly interest rate with Boe, with a little chance for a third, depending on the levels that provide the markets of the Svop.

According to Friday, ons, the production sector decreased by 1.1 percent in January, by 0.2 percent in construction, and services increased by 0.1 percent.

Liz McCowun, Director of Economic Statistics ons, said the overall picture for the UK economy was “weak growth”.

However, the services continued to grow in January, she said: “Under the guidance of a strong moon for retail, especially food stores when people ate and drank more.”

Ons said the publication of trade data, which are usually available with GDP, was arrested from the mistakes.