Commenting on ONS data that shows GDP fell by 0.1% in January 2025, following growth of 0.4% in December, Anna Leach, Chief Economist at the Institute of Directors, said:

“January’s growth disappointment was driven by a broad-based decline in manufacturing. The ONS highlight weakness in the manufacture of motor vehicles, who are facing profound trade uncertainty on top of pre-existing policy uncertainty. Meanwhile, although services grew, reference to people eating and drinking at home more rather than at pubs and restaurants point to a straightened and cautious consumer.

“As we move further into 2025, headwinds to growth are rising – both in the UK and globally. Cost concerns are rising as UK business again face pipeline inflationary pressures driven by rising taxes, energy prices and for some sectors, the new packaging levy. Global uncertainty has risen sharply as US tariff policy and reciprocal actions make it difficult for businesses to predict market demand and set pricing. Amidst this complexity, it’s welcome to see the Planning and Infrastructure Bill published alongside moves to remove other blockers to growth through the scrapping of some regulatory bodies. These policies are a good start, but the private sector remains hamstrung by Budget measures that increase the cost and risk of employment. A weakened private sector makes it all the more important to lift public sector productivity. This must be a driving priority for the Spending Review.”