UK economy records zero growth in January as minister tells LBC energy firms being watched 'very closely'

Official data released by the Office for National Statistics (ONS) on Friday revealed that Gross Domestic Product did not rise or fall across the month.

The UK's economy grew by 0.1 per cent in the final three months of 2025, but the latest numbers will come as a blow to Chancellor Rachel Reeves.

The most recent ONS figures do not include the impacts of the ongoing US-Israel war with Iran, which sent the price of oil to $100 a barrel earlier this week.

Read more: Trade disruption from Iran war ‘not good for the British economy’, Reeves says

Read more: The Strait of Hormuz is where the fate of the world economy rests

Ms Reeves said: "Our economic plan is the right one, but I know there is more to do.

"In an uncertain world, we are building a stronger and more secure economy by cutting the cost of living, cutting national debt and creating the conditions for growth to make all parts of the country better off."

Director of economic statistics at the ONS, Liz McKeown, said: "The overall picture remains subdued, with no growth in the latest month."

Energy Minister Michael Shanks told LBC on Friday that energy firms being watched “very closely” for profiteering.

Mr Shanks told Nick Ferrari at Breakfast: "What we've done over the past few days is have a series of meetings with those responsible for bits of our energy system to be really clear with them that this is the moment we're watching very closely.

"The Competition and Markets Authority is watching very closely. Consumers should be foremost in our mind and we should be doing everything we possibly can to keep the price down.

"Now, we obviously recognise global uncertainty and the price of oil does mean that prices will be driven upwards. But we don't want to see this as a moment where there is profiteering or taking advantage of that.

"The Chancellor and the energy sector repeat that message to fuel bosses in Downing Street today."

It comes after Reeves asked the competition watchdog to "crack down' on "rip-off" fuel prices amid uncertainty in the Middle East.

She wrote to the Competition and Markets Authority (CMA) requesting it to stay on "high alert" for "unjustifiable" price hikes, the ministry said.

Reeves and Energy Secretary Ed Miliband will also press petrol retailers and energy suppliers to ensure drivers are not left paying "over the odds" in a Downing Street meeting on Friday.

Most economists had expected growth of 0.2 per cent in January.

Housebuilding in particular saw a tough start to the year, with private housing new work plunging by 5.6 per cent across the month, the worst performance since March 2020 at the start of the Covid pandemic.

Amid the ongoing war, the Strait of Hormuz, a vital shipping lane for oil, has been closed causing oil prices to spike to around $100-a-barrel.

Iran has since threatened to take action to increase the cost of crude even further, telling the world to get ready for "$200-a-barrel oil" on Wednesday.

US treasury secretary Scott Bessent said on Thursday that he believes that his nation's navy will soon be deployed to the key waterway to prevent ships from being attacked after suspected Iranian drone strikes hit three ships.

Experts said that Bank of England policymakers are likely to hold off from cutting interest rates next Thursday despite the UK’s tepid economic performance in recent months.

Barret Kupelian, chief economist at PwC, said: "The figures also cover only activity up to January, so they do not yet capture any spillovers from the latest Middle East tensions through energy prices, trade or financial markets.

"In calmer conditions, soft growth and a steady fiscal stance would strengthen the case for rate cuts. But central banks do not ease into a fog of geopolitical uncertainty.

"The case for lower rates is there domestically, but geopolitics may yet delay the verdict.'