The UK economy registered a surprise decline at the start of the year, numbers on Friday showed, with minor growth in the service sector more than offset by decline elsewhere.
The Office for National Statistics said UK gross domestic product shrank by 0.1% in January from December, confounding FXStreet-cited market expectations of a 0.1% rise. In December, the UK economy had grown 0.4% from November.
The ONS said the decline was “mainly caused by a fall in the production sector”.
“Monthly services output grew by 0.1% in January 2025, following growth of 0.4% in December 2024, and grew by 0.4% in the three months to January 2025,” the statistics agency explained.
“Production output fell by 0.9% in January 2025, following growth of 0.5% in December 2024, and fell by 0.9% in the three months to January 2025, with manufacturing output driving both the monthly and three-month falls. Construction output fell by 0.2% in January 2025, following a fall of 0.2% in December 2024, but grew by 0.4% in the three months to January 2025.”
The production decline in January was worse than expected. A less steep 0.1% fall was forecast, according to FXStreet.
“Monthly production output in January 2025 was at its lowest level since May 2020,” the ONS added.
On an annual basis, production declined 1.5% in January, easing from a 1.9% drop in December. The January figure still was worse than consensus of a lesser 0.7% decline.
The pound fell to USD1.2929 shortly after the data from USD1.2940 beforehand.
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