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UK economy shrinks 2.9% in January, ONS reveals

The Office of National Statistics (ONS) has reported a 2.9% fall in UK GDP in the first month of the year, as a result of the pandemic.

Despite a small increase of 1.2% in December last year, January’s overall GDP figure is 9% lower compared to the same period last year, before the pandemic broke out.

The ONS revealed a 1.5% decrease in output in the production industry, while manufacturing contracted by 2.3% since April 2020.

Meanwhile, the construction industry grew by 0.9% in January 2021.

Although there was no mention of Brexit in the ONS report, Suren Thiru, head of economics at the British Chambers of Commerce, said:

“The latest data confirms a better than expected start to the year for the UK economy as the third lockdown and post-Brexit border disruption combined to trigger only a relatively modest decline in economic activity in January.”

He added:

“The vaccine rollout and Budget stimulus will boost output as restrictions ease. However, the lingering economic effects of COVID, including elevated consumer and business debt levels, may severely limit the pace of any recovery.”

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