Sky News Interrupts for Breaking Update in Major Blow to Rachel Reeves and Keir Starmer
Sky News presenter Anna Jones delivered the latest GDP data from the Office for National Statistics, revealing that the UK economy shrank by -0.01% in January. Describing this as a “worry” for Chancellor Rachel Reeves, Jones noted that “many of her numbers depend on good growth” and turned to business and economics correspondent Paul Kelso to help explain the figures.
Kelso pointed out, “They show us in the first month of the year, January, the economy contracted. Growth fell by -0.01%. The consensus was for growth of 0.1%, so it’s not much either side of zero, but being on the wrong side of zero is where nobody wants to be.” He also highlighted that in December, the economy had grown by 0.4%, which was slightly surprising. However, the last two quarters of 2024 had shown flat growth, and this new data was not what the Chancellor or British businesses had hoped for.
More: 13-Year-Old Girl Killed a Mom of 3 & Set Her House on Fire & No One Knows Why
More: Keir Starmer Plans to Scrap NHS England in Radical Health Service Overhaul!
Kelso continued, “January was when the government’s growth narrative began. Every time you spoke to a government minister… growth was the message. We can see why, because it wasn’t being delivered in January.” The main contributor to the negative growth, he explained, was a nearly 1% drop in production, which includes goods manufacturing. While the economy had seen some buoyancy due to services—making up the bulk of the economy—this dropped away in January.
He added, “This rather confirms the trend of an economy bumping along around zero.” With the spring statement just 10 days away, the Office for Budget Responsibility (OBR) will soon deliver its updated figures on how the economy is performing against the Chancellor’s projections. Kelso pointed out that these numbers are crucial for Reeves, as her fiscal plans rely on growth to help navigate the tough financial situation. However, January’s figures have made this much harder to achieve.
More: Martin Lewis Crashes Website in Minutes After Free Wills Advice on ITV Show
More: 5-Year-Old Dies in Horror Explosion—Medical Staff Face Murder Charges
Kelso also mentioned that the ONS had postponed the publication of trade figures due to errors discovered in the data, raising questions about the impact on GDP estimates. “It would be lovely this morning to know how much we were exporting to the US,” he said. The ONS stated that the error dated back to 2023 and they would take extra time to ensure the figures are accurate. Kelso added that the uncertainty around trade figures could potentially affect GDP estimates, making it difficult to assess the full economic picture.
In light of these figures, the Chancellor’s focus on increasing funding for the defense industry during her visit to Scotland today seemed to be woven into the government’s growth agenda, even as global security concerns have grown. These ongoing issues leave the government’s economic strategy facing tough challenges. As The Daily Express reported, the latest data adds pressure on Reeves and Starmer, as they prepare for the upcoming spring statement.
