Bleak economic data shows UK plc in trouble well before the Middle East crisis

"The UK economy was flatlining even before Donald Trump's Operation Epic Fury on Iran unleashed higher oil prices, threatening the outlook for growth and inflation. The latest data from the Office for National Statistics showed zero GDP growth in January, with only 0.2% growth on the three-monthly measure, a slight improvement on 0.1% in the three months to December."

"The sectoral breakdown gives little cause for optimism. The services sector grew by 0.2% in the three months to January, but employment activities such as recruitment consultancy were down by 5.7%, signalling a rapidly weakening labour market. Construction output fell by a hefty 2% in the three months to January, undermining Labour's promise to be builders with billions set aside for infrastructure projects."

"Oil prices have been zigzagging around the $100 a barrel mark for several days, and with the strait of Hormuz still effectively closed as a result of Iran's reprisals against US attacks, look likely to stay high for some time. That will hit consumers rapidly via higher petrol prices and could set in chain an increase in utility bills."

The UK economy demonstrates minimal growth momentum, with zero GDP expansion recorded in January and only 0.2% growth on a three-monthly basis. The services sector grew modestly at 0.2%, though employment activities declined sharply by 5.7%, signalling labour market deterioration. Production growth of 1.2% was artificially boosted by Jaguar Land Rover's recovery from a cyber-attack shutdown. Construction output fell 2% over three months, contradicting Labour's building agenda despite pledges for infrastructure investment and 1.5 million new homes. Rising oil prices near $100 per barrel, exacerbated by Iran tensions and Strait of Hormuz disruptions, threaten consumer spending through higher petrol and utility costs, further undermining economic resilience.

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