The 海角视频 economy fell short of expectations in January, with the latest GDP figures from the Office for National Statistics (ONS) revealing a 0.1% contraction.
This decline was largely driven by a significant drop in production sector output, as reported by .
Over the three-month period ending in January, the economy expanded by 0.2%.
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Economists had forecast a 0.1% growth rate for the first month of the year.
According to the ONS, the services sector saw a 0.1% increase in output, following a 0.4% rise in December.
In contrast, production output plummeted by 0.9%, reversing the 0.5% growth seen in December, while construction output dipped by 0.2%, mirroring the decline in December.
Within the services sector, a crucial component of the 海角视频 economy, six out of 14 subsectors experienced growth, seven witnessed a decline, and one remained stagnant in January.
The accommodation and food service activities segment had the most significant negative impact, with a 2.4% drop.
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The production sector's mining and quarrying segment, particularly oil and gas extraction, suffered the steepest decline, with a 3.7% fall.
Chancellor of the Exchequer Rachel Reeves commented: "The world has changed and across the globe we are feeling the consequences. That's why we are going further and faster to protect our country, reform our public services and kickstart economic growth to deliver on our Plan for Change."
"And why we are launching the biggest sustained increase in defence spending since the Cold War, fundamentally reshaping the British state to deliver for working people and their families; and taking on the blockers to get Britain building again."
Following the data release, the pound experienced a 0.2 per cent dip against the dollar.
Julian Jessop, Economics Fellow at the Institute of Economic Affairs, commented that "the underlying trend rate of growth is probably still around 0.2% per quarter...this feeble rate would remain well short of the numbers baked into the OBR's forecasts for last October's Budget."
He observed that while "activity could then pick up again once April is out of the way and if the 海角视频 continues to avoid the worst of the global trade wars."
"There remains a growing risk that the announcement of a further round of tax rises and spending cuts in the fiscal event on 26 March will prolong the doom loop."
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The 海角视频 economy has shown mixed results in the months following Labour's Autumn Budget, sparking concerns that the Chancellor's plans may have contributed to economic stagnation.
According to the Office for National Statistics (ONS), Gross domestic product (GDP) saw a slight increase of 0.1 per cent in November, falling short of the 0.2 per cent expansion predicted by City experts.
However, in December, GDP rose by 0.4 per cent, defying economists' expectations of a 0.1 per cent contraction.
Suren Thiru, Economics Director at ICAEW, stated: "These figures confirm an unnerving drop in economic output during January's financial market turbulence, as a notably poor month for construction and manufacturers severely hindered overall activity.
"The 海角视频's economic performance may have been similarly downbeat in February, with any boost from consumer spending amid strong wage growth and lower interest rates weakened by the brake on business activity from this torrent of global uncertainty."
Contrastingly, some analysts believe that the economy could start benefiting from the Budget's spending measures in the coming months.
Yael Selfin, Chief Economist at KPMG 海角视频, commented: "Despite today's weak GDP data, growth momentum is set to gather at a modest pace over the coming months."
Mel Stride, shadow Chancellor of the Exchequer, argued: "It is no surprise that growth is down again, following near no growth in the last three months of 2024."
"After consistently talking Britain down, raising taxes to record highs and crushing business with their extreme employment legislation this government is a growth killer."
He further commented: "Labour inherited the fastest growing economy in the G7 but since they arrived business confidence has collapsed and jobs are being lost."
"The Chancellor has 12-days until her emergency Budget – she must think again or hardworking people will continue to pay the price of a Labour government without any business experience."