Reeves Says “Our Economic Plan Is The Right One.” The Data Says Otherwise
No growth in January, eating out down, recruitment weakening and private housebuilding still soft — the latest figures suggest Britain’s economy is not moving in the direction ministers claim.
The UK economy flatlined in January. Services went nowhere, eating out fell, private housebuilding remained weak, and parts of the state-heavy economy helped stop the picture from looking worse. Strip away the spin and the same problem remains: Britain is not generating enough private-sector growth to sustainably fund the size of state it now carries.
📉 Flat Growth Is Still Weak Growth
The headline is simple: the UK economy showed no growth in January. That follows growth of just 0.1% in December and 0.2% in November. Over the last three months, GDP grew by only 0.2%. Services rose 0.2%. Construction fell 2.0%.
That is not a take-off. That is not recovery. That is an economy stuck in the mud.
There will be the usual attempt to spin this as resilience. But zero growth is still zero growth.
Services, the biggest part of the economy, showed no growth at all in January. Production fell 0.1% on the month. Construction rose 0.2%, but even that came with a big catch. This is not a broad-based strength. It is patchy, shallow and fragile.
🍽️ Eating Out Is Falling — And That Matters
One of the most telling details in the release is what is happening in hospitality.
Accommodation and food service activities fell 1.8% in January, and within that, food and beverage service activities fell 2.7%. In plain English, people are eating out less.
That is one of the clearest real-world signs of pressure in the economy. When household budgets are stretched, meals out are one of the first things to go. The treat gets cut. The coffee run gets skipped. The pub visit gets binned. And this is where it becomes a vicious circle.
Hospitality is already under pressure. If customers start pulling back while businesses are being hammered by higher costs, the sector gets squeezed from both sides. Less demand. Less revenue. Less confidence. Less hiring.
That is how weakness spreads.
👔 The Recruitment Market Is Flashing Warning Signs
Another ugly number in the release is that employment activities were down 5.7% in January.
That sounds technical, but it is not. It basically means the recruitment and temp-agency market has taken a hit.
And that matters because it is often one of the first places you see nerves show up.
When employers feel confident, they hire. When they get jittery, recruitment slows, agency demand drops, and firms start sitting on their hands.
So put the pieces together: people are eating out less, hospitality is under strain, and recruitment activity is falling sharply.
That does not look like a confident private economy. It looks like a private economy retreating into caution.
🏛️ The State Is Helping Keep The Numbers Afloat
This is where the release gets politically awkward.
There were some brighter spots in services. Retail and wholesale had a better month. Some professional services held up. But the wider private economy was patchy, while government-linked parts of the economy helped keep the overall picture from looking even worse.
That point needs to be made carefully — but it should still be made. This is not proof that the public sector alone is carrying the whole economy.
But it is fair to say that without state-linked activity cushioning the numbers, the picture would look weaker. And that leads to the deeper problem. The state cannot fund itself.
You can prop up headline GDP for a while through government-heavy activity. You can expand public spending. You can keep the machine going.
But in the end, the money has to come from somewhere. It comes from businesses investing, employing, producing, selling and paying tax. If the private sector is weak while the public sector keeps growing, the foundations start to look shakier and shakier.
You cannot build a stronger country on a weaker tax base.
🏠 Britain Is Repairing More — But Building Less
Housebuilding is another clear weak spot.
Construction output fell 2.0% in the three months to January, after a 2.1% fall in the previous three-month period. Within that, private housing new work fell 6.3%.
That is one of the most telling numbers in the whole release.
Because when private housebuilding is weak, it tells you confidence is weak too. Developers are not exactly charging ahead. Investors are not exactly brimming with optimism. And the wider economy loses out.
Yes, construction rose 0.2% in January. But that was only because of repair and maintenance. New work actually fell 2.0% on the month.
So Britain is patching things up, not pushing forward.
And you do not solve a housing shortage, boost growth, or lift productivity by endlessly repairing old stock while private housebuilding slides backwards.
🛍️ Consumer Britain Still Looks Soft
The ONS also says consumer-facing services were flat in the three months to January.
That matters because these are the parts of the economy people actually feel: shops, restaurants, travel, leisure, hospitality, and everyday spending.
Yes, there was a tiny 0.1% rise in consumer-facing services in January. But that is hardly a great consumer comeback. And even inside that, food and beverage services were dragging things down.
So the idea that the British consumer is back out there powering growth just is not borne out by the figures.
Consumers are still cautious. Businesses still look cautious. And the economy overall still looks weak.
👥 GDP Per Head Still Matters More Than The Headline
This is also a good moment to remind people of the bigger picture of living standards.
At the end of 2025, Britain had already seen two consecutive quarters of falling GDP per head.
That matters because governments love talking about total GDP. But if the economy is barely growing while the population keeps rising, the average person can still end up worse off.
That is the key point. A flat or slightly positive topline number does not automatically mean living standards are improving. In fact, they can still be going backwards.
And that is why GDP per head matters.
⚠️ Final Thought
Reeves says, “our economic plan is the right one.”
But these numbers do not suggest an economy on the right track. They suggest an economy still struggling to generate genuine private-sector momentum, while state-linked activity helps stop the numbers from looking even worse.
No growth in January. Eating out down. Recruitment activity down. Private housebuilding weak. Consumer-facing services flat.
That is not a recovery. A strong public sector depends on a strong private sector beneath it. If Britain is not building enough, hiring enough, producing enough and selling enough, then the state is resting on foundations far weaker than ministers want to admit.
The economy is being kept upright. It is not being transformed.
✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions
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I suppose when she says "Our economic plan is the right one" it depends on what the aims of the plan are.
The jockey (The public sector) is too heavy for the horse (The private sector) . The jockey keeps eating and the horse is struggling to get over the first fence. There should be a stewards enquiry (General Election) !