UK economy stalls in January as growth fears rise

Britain’s economy showed no growth in January, according to official data released on Friday, raising concerns that economic conditions could worsen as rising oil prices linked to the Middle East conflict put pressure on global markets.

Gross domestic product remained flat at the start of the year after expanding by 0.1 percent in December, the Office for National Statistics said. The figures highlight ongoing challenges for the UK economy since Prime Minister Keir Starmer’s Labour government came to power in July 2024.

Analysts warn that the conflict involving Iran, the United States and Israel could push inflation higher and further slow economic growth. Finance Minister Rachel Reeves acknowledged that more efforts are needed to strengthen the economy in what she described as an uncertain global environment.

Economists say rising oil prices and fears of major supply disruptions are overshadowing the latest growth figures. The UK, which relies heavily on imported energy, could face higher fuel and energy costs, adding pressure on businesses and households.

The situation may also affect monetary policy. The Bank of England had been expected to cut interest rates soon, but economists now believe the central bank may instead keep rates unchanged or even raise them due to inflation risks.

Experts warn that an energy price shock could further weaken economic activity in the coming months, making it more likely that UK growth will slow rather than accelerate.