The economy shrank by 0.1 per cent in January according to figures just published by the Office for National Statistics (ONS). The news will come as a disappointing shock to Rachel Reeves after most economists had predicted the year to have started with growth. In December the economy had grown by 0.4 per cent, but a fall in production of 0.9 per cent and in construction of 0.2 per cent tipped the economy back into contraction. Services were up marginally but not by enough to lead to overall growth.
Liz McKeown, the ONS’s director of economic statistics, pointed to a ‘notable slowdown’ in manufacturing compounding a downturn in oil and gas extraction as well as construction. On the other hand, it was a strong month for food sales as more people ate and drank at home.
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