UK economy shrinks by monthly 2.9% in January

Britain’s economy shrank by a less severe than expected 2.9% in January from December as the country went back into a coronavirus lockdown, official data showed on Friday. Economists polled by Reuters had expected a contraction of 4.9%.

Britain’s economy is likely to shrink by 4% in the first quarter of 2021, due mostly to the latest lockdown but also because of disruption caused by new, post-Brexit rules for trade with the European Union, the Bank of England said last month.

“Manufacturing also saw its first decline since April with car manufacturing falling significantly. However, increases in health services from both vaccine rollout and increased testing partially offset the declines in other industries.” Britain’s economy shrank by 1.7% in the three months to January, stronger than a median forecast of a contraction of 2.5% in the Reuters poll. The economy was 9.2% smaller than in January last year, the Office for National Statistics said.

UK economy shrinks by monthly 2.9% in January, CNBC, Mar 12