Monthly gross domestic product (GDP) was stagnant in January, following rises of 0.1% and 0.2% in December and November respectively.
The ONS reported that services had no growth and production fell by 0.1% on a monthly basis. Meanwhile, construction experienced growth of 0.2%.
From a quarterly perspective, real GDP saw growth of 0.2% – a slight increase on the 0.1% growth seen in the three months to December.
Services output and production output respectively expanded by 0.2% and 1.3% quarterly, while construction output declined by 2%.
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January performance ‘worse than expected’
The markets had expected the Bank of England’s Monetary Policy Committee (MPC) to lower the base rate at its next meeting on 19 March, but recent uncertainty in light of the US-Iran conflict means a hold may be more likely.
And Richard Pike, sales and marketing director at Phoebus Software, noted that the current macroeconomic backdrop means the picture is likely to worsen as time moves on.
He added: “The UK economy performed worse than expected in January. The three-monthly figure shows growth of 0.2% boosted by production output, but growth was flat on a monthly basis. Worryingly, things are only going to get worse as a result of the Iran conflict. This will have a significant impact on the economy, at least in the short term, so it’s likely that growth will be affected over the coming months.
“The mortgage market is in turmoil at the moment, with products being pulled daily and rates rising to their highest since last summer. While some borrowers will be rushing to lock in rates, others will be putting their plans on hold.”
He added: “Construction output fell yet again and will be affected even further by the fallout from the war. With housing supply strangled and borrowing becoming more expensive, this doesn’t bode well for the market in the coming months. We can only hope that this conflict is resolved sooner rather than later.”
