EuroWire, LONDON: Britain’s economy was flat in January, official data released on Friday showed, as a drop in activity at restaurants, pubs and cafes underscored continued pressure on discretionary spending at the start of 2026. Gross domestic product showed no monthly growth after gains of 0.1% in December and 0.2% in November. The reading left output at the same level as six months earlier and pointed to a weak opening to the year for an economy that had already been losing momentum.
The clearest drag came from hospitality. Accommodation and food service activities fell 1.8% in January, while food and beverage service activities dropped 2.7% after rising 1.6% in December. That made food and drink venues the largest negative contributor within consumer-facing services for the month. Services output overall was flat, production fell 0.1% and construction rose 0.2%, leaving the headline GDP figure unchanged despite pockets of strength in other parts of the economy.
Over the three months to January, GDP grew 0.2%, following 0.1% growth in the three months to December and no growth in the three months to November. The pace was weaker than economists had expected and extended a run of subdued readings through the second half of last year. Services output rose 0.2% over the latest three-month period and production grew 1.3%, while construction fell 2.0%. Compared with a year earlier, GDP was 0.8% higher in January and 0.9% higher on a rolling three-month basis.
Hospitality and hiring weaken demand
Retail trade provided one of the few brighter spots. Wholesale and retail trade, including vehicle-related activity, rose 1.0% in January and was the largest positive contributor to services output, driven by a 1.8% increase in retail trade excluding motor vehicles and motorcycles and a 1.1% rise in wholesale trade. Professional, scientific and technical activities also advanced 0.6%, helped by stronger scientific research and development, but those gains were not enough to offset broader softness in consumer-facing areas.
Another major drag came from administrative and support services, which fell 2.3% in January. Within that category, employment activities dropped 5.7%, the steepest negative contribution from any single industry to both services output and overall GDP, while rental and leasing activities fell 3.9%. Consumer-facing services as a whole rose 0.1% in the month after a 0.3% increase in December, but output across that broader category showed no growth in the three months to January.
Output remains stuck at mid-2025 levels
The January figures added to evidence that the UK economy entered 2026 with little momentum after a subdued second half of last year. Office for National Statistics data showed the level of output at the end of January was essentially unchanged from June, despite modest month-to-month gains late in 2025. In the three months to January, support came from manufacturing and energy supply within production, while declines in accommodation, real estate and arts-related activities continued to weigh on the wider services-led economy.
For households and businesses, the latest snapshot pointed to continued caution in discretionary activity, with the drop in food and beverage services standing out even as shops posted firmer trade. The data also showed that seven of the 14 services subsectors expanded in January, highlighting a mixed picture rather than a broad-based contraction. Still, with monthly GDP flat and consumer-facing output stagnant over the latest three-month stretch, the official reading showed the economy began the year on a soft footing.