The British economy unexpectedly shrank during January, piling pressure on Treasury chief Rachel Reeves before a key statement about the state of the public finances later this month.

Sterling lost some ground versus the dollar on Friday after data painted a grim picture of the British economy, and it softened against the euro as prospects of a German debt deal lifted the shared European currency.

The Office for National Statistics (ONS) said the economy contracted 0.1% during the month, behind expert predictions and down from a 0.4% rise in December. | ITV National News

The economy contracted by 0.1%

Britain's economy unexpectedly shrank in January, official data showed Friday, piling more pressure on the Labour government ahead of its Spring Statement on the economy.

The slowdown in January piles further pressure on Rachel Reeves and Sir Keir Starmer ahead off this month’s spring statement