Bad weather hits UK mfg, construction sectors

London: The British economy unexpectedly shrank during January, piling pressure on Treasury chief Rachel Reeves before a key statement about the state of the public finances later this month. Official figures on Friday showed that the economy, the world’s sixth-largest, saw output drop by 0.1 per cent during the month, in contrast to expectations for a modest increase and December’s solid 0.4 per cent gain.

The Office of National Statistics said the weak performance was largely due to bad weather affecting the manufacturing and construction sectors, despite a solid performance by the services sector, which accounts for around 80 per cent of the British economy. Though monthly figures are notoriously volatile and prone to future revision, the decline puts in sharp relief the struggles the Labour government, elected last July after 14 years in opposition, is having in generating growth.

Prime Minister Keir Starmer has said raising the UK’s economic growth is his government's number one priority over the next five years. Since the global financial crisis in 2008-9, the British economy's growth performance has been historically lackluster.