The Government is beginning to see just how mighty oaks from little acorns can grow after a dismal week on the economic trends front effectively slapped the Prime Minister and Chancellor across the chops for opening their term with a wave of doom and gloom messages. Three months shy of its first anniversary, talking the economy down and upping the taxes has already taken its toll: GDP shrank and hospitality insolvencies surged in January. How’s the growth plan looking now?

The UK economy contracted marginally in January, heaping yet more pressure on ministers to reverse course on its anti-business Treasury policy.

Data released by the Office for National Statistics showed that following growth of 0.4 per cent in December, the first month of 2025 saw Gross Domestic Product shrink by 0.1 per cent, with a fall in both manufacturing and construction output attributed as the substantive cause. 

Even sympathetic commentators like the Guardian conceded that this halting performance made for an “unhelpful backdrop” for Rachel Reeves’ upcoming spring statement, given that both she and the prime minister have made a drive for economic growth one of the pillars of their government.

Meanwhile, UK business stakeholders have been quick to attribute the flagging numbers to the raft of operational cost increases resulting from energy price inflation and the incoming fallout of Reeves’ disastrous Autumn Budget stipulations. 

Others have also pointed to the government’s poor judgement in talking down the economy in its early term declarations, a blame game attack on the previous government that, albeit true, disastrously backfired and instead sparked a huge lack of confidence in the business community.

“With businesses facing an impending avalanche of cost pressures, it’s unsurprising that growth is in trouble,” remarked British Chambers of Commerce research manager Stuart Morrison, surmising the economy was now “treading water.” 

UK Hospitality chief executive Kate Nicholls concurred. 

“Hospitality growth had been storming ahead in November and December but, like the economy, contracted in January,” she said. “This shows how vulnerable businesses are and emphasises the need for action at the Spring Statement to reduce costs and boost business confidence.”