The Economy of Great Britain unexpectedly shrunk by 0.1% month by month in January, Showed official data on Friday.
The British National Statistics Office stated that the fall was mainly caused by contraction in the production sector.
Economists surveyed by Reuters expected the country's GDP to increase by 0.1%.
At 7:35 in London, shortly after the data is issued, British pound fell by about 0.15% compared to the dollar for trade at a price of USD 1.293. Sterling was flat against the euro.
Meanwhile, long -term costs of government loans, which Enriched with many decades at the beginning of this yearRose. Performance on 20-year government bonds in Great Britain – known as Gilts – 2 base points were added, a 30-year gold plate yields There were 4 base points.
Services exit increased by 0.1% month month in January, but they meant a slowdown with a 0.4% increase in December. Production dropped by 0.9% per month, after registration of the increase of 0.5% in the previous month. Meanwhile, monthly construction production fell by another 0.2% in January, after it also dropped 0.2% in December.
In the fourth quarter, the economy in Great Britain increased by 0.1%, overcoming expectations, ONS data showed last month. This FlatLined in the third quarter.
Since then, monthly GDP data has been checked, with 0.1% contraction in October, Expansion by 0.1% in November and extension by 0.4% month per month in December thanks for the increase in services and production.
The Friday version of GDP will be the last data print before the “Spring statement” of Great Britain on March 26, when Chancellor Rachel Reeves presents his plans for the British economy.
The statement is issued together with economic forecasts from the Budget Liability Office, independent economic and fiscal forecasting in Great Britain, which contains an assessment of the likely impact of government tax plans and expenses.
There were fears Treasury fiscal planswhich have been presented last autumn and which will increase the tax burden on British companies, may charge investments, jobs and growth. Reeves defended his tax taxes, saying that they are a one -time means and necessary to increase investments in public services.
The Bank of England made the first reduction in interest rates in February, there were to be further signaling, when it reduced the UK growth forecast to 2025 from 1.5% to 0.75%.
Markets widely expect that the Bank of England will maintain permanent rates at 4.5% at the meeting of the Monetary Policy Committee next week, LSEG showed on Friday.
The Central Bank said that assessing how to balance the need to increase growth along with the inflation risk created by US President Donald Trump's commercial tariffs. Until now, Great Britain has not been specially targeted, but its exports of steel and aluminum to the US will be subject to Trump's blanket 25% of import duties on metals.
In the note on Friday, Paul Dales, the main economist of Great Britain at Capital Economics, said that the data emphasize the weakness of the British economy before he fully determined the impact of growing taxes on economic activity and geopolitical uncertainty.
“Most of the weaknesses are simply a return of a surprisingly strong GDP growth by 0.4% m/MW December,” he said. “In other words, the December characters made the economy look stronger than in reality, and the January makes it a bit weaker. The truth is probably that the basic growth rate is slightly above zero. “
He added that although the general tariffs of US President Donald Trump on steel and aluminum had They only come into force this weekThey could already influence the economy of Great Britain.
“The decrease in production by 1.1% m/m was partly caused by a drop in metals by 3.3% m/m” – he explained. “It is probably related (with tariffs) as expected for some time.”
Speaking on Wednesday in parliament, the Prime Minister of Great Britain Keir Starmer He told politicians He hoped that Great Britain could still avoid the protectiveist trading policy of Trump.
“I am disappointed, seeing global tariffs in relation to steel and aluminum, but we will accept a pragmatic approach,” he said. “We negotiate an economic agreement that covers and will contain tariffs if we succeed, but keep all options on the table.”