The Office for National Statistics (ONS) has reported that gross domestic product (GDP), a measure of how the economy is doing, showed zero growth in January, following growth of 0.1% in December 2025.
The ONS said that there was no growth in the services sector in January. It noted that food and drink service activities fell by 2.7%. January is often a tough month for hospitality businesses.
The production sector fell by 0.1%, while the construction sector grew by 0.2%.
Interestingly, GDP has grown by 0.2% over the three months to January. Looking at GDP on a three-monthly basis can be a less volatile measure to compare against than the monthly figures.
The Prime Minister Keir Starmer has already warned that the longer the Middle East conflict continues, the more likely the UK economy will be affected. Increases in oil prices are already being felt and added pressure on inflation is likely to delay interest rate cuts that were otherwise expected.
UK businesses are facing a “cost of business crisis”, according to the British Chambers of Commerce (BCC). Its new cost-stack calculator shows government policy alone has pushed up an average firm's expenses by 70% over the past decade, adding roughly £827,000 a year in costs for a typical mid-sized business. About a quarter of the rise stems from the increase in employer National Insurance contributions, with the higher minimum wage and mandatory pension auto-enrolment also major contributors.
Under Making Tax Digital (MTD) for Income Tax, sole traders and landlords with income of more than £50,000 have been required to keep digital records and send quarterly updates to HMRC since 6 April 2026.
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