The UK economy flatlined month-over-month in January 2026, after edging up 0.1% in December and falling short of market expectations for a 0.2% increase. Output in the services sector was unchanged (compared with a 0.2% rise in December), with the largest drag coming from administrative and support service activities, which contracted by 2.3%. This was mainly driven by a 5.7% decline in employment activities and a 3.9% fall in rental and leasing. By contrast, the strongest positive contribution within services came from wholesale and retail trade and the repair of motor vehicles, which together rose by 1%.
Industrial production slipped 0.1%, adding to a 0.9% decline in December. The fall was led by mining and quarrying, down 3.2%, and by a 0.3% decrease in electricity, gas, steam, and air conditioning supply. These weakness were partly offset by a 1.9% increase in water supply, sewerage, waste management and remediation activities, and a marginal 0.1% rise in manufacturing output. The construction sector grew by 0.2%.
On a year-on-year basis, GDP expanded by 0.8%. Over the three months to January, the economy grew by 0.2%.
