The UK’s economy contracted in January.
According to new figures from the Office for National Statistics (ONS), GDP (gross domestic product), a key measure of economy growth, is estimated to have fallen by 0.1% month-on-month in January, contrasting expectations of a 0.1% rise and growth of 0.4% in December.
It reflects, across key sectors, monthly services output growing by 0.1% in January, following growth of 0.4% in December, production output falling by 0.9%, following growth of 0.5% in December, and construction output dropping by 0.2%, following a fall of 0.2% in December.
Ben Jones, CBI Lead Economist, said: “After a surprisingly strong performance in December, some pay-back was always a possibility in January. But the mixed picture across different sectors in recent months suggests the recovery is still fragile.
“There are signs that the drop in business and consumer economic confidence following the Autumn Budget is bottoming out. But downside growth risks remain from the potential for a softer labour market and an uptick in inflation. And rising global trade tensions could also keep business investment on the sidelines.
“Amid a very fluid international environment, the government’s domestic growth agenda can serve as a North Star. Yesterday’s announcements to reduce regulatory burdens in a variety of sectors were welcome. But businesses are still struggling with high energy costs, increased labour costs and the possibility that the Employment Rights Bill makes hiring riskier and more costly still.
“The government should be looking for every opportunity – not least via the upcoming Spending Review and industrial strategy – to support businesses with measures that give them the confidence to invest, grow and boost productivity.”
