Financial News: UK Economy Flatlines In January

UK Economy Flatlines In January

03/13/2026 - 08:55:00 (RTTNews)

(RTTNews) - The UK economy logged no growth in January, even before the onset of the conflict in the Middle East that created a significant oil supply shock.

Gross domestic product remained flat after rising 0.1 percent in December and 0.2 percent in November, the Office for National Statistics reported. Economists had forecast a monthly growth of 0.2 percent.

The dominant service sector registered no growth and industrial production edged down 0.1 percent. Meanwhile, the construction sector expanded 0.2 percent.

On a yearly basis, the economy expanded 0.8 percent in January, slightly weaker than forecast of 0.9 percent.

In the three months to January, real GDP grew 0.2 percent, following a growth of 0.1 percent in the three months to December.

"Today's data shows the UK economy remains stuck in a worrying low growth trap," British Chambers of Commerce Research Manager Stuart Morrison said.

"The situation is likely to get worse before it gets better." "Recent global uncertainty, including US tariffs and the Middle East conflict, have upended the economic outlook," Morrison added.

Confederation of British Industry Deputy Chief Economist Alpesh Paleja said the near-term outlook was dominated by heightened uncertainty surrounding conflict in the Middle East.

Paleja said energy prices increased sharply, and if sustained it will only intensify the mix of high inflation and weak growth.

ING economist James Smith said the bar for the Bank of England to hike rates is high. But the longer energy prices stay elevated, the longer the bank is likely to stay on pause, he noted. Smith said the possibility of a March rate cut has all but evaporated.

The BoE is set to announce its monetary policy decision on March 19. Currently, the bank rate at 3.75 percent is the lowest since early 2023.

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