Clock is ticking for ‘Lettuce 2.0’ Rachel Reeves after economic system shrunk in January

Rachel Reeves’ economic growth plans are at risk following confirmation that GDP contracted by 0.1%, after most economists predicted a 0.1% growth

The clock is ticking for “Lettuce 2.0” Rachel Reeves after Britain’s economy shrunk in January.

Her economic growth plans are at risk following confirmation that GDP contracted by 0.1%.

It marks a massive and potentially fatal blow for the Chancellor, who has made growth her overriding mission and staked her reputation on it.

The Office for National Statistics said the figures, which follow a sharp fall in the manufacturing sector, continued to show “weak growth”. Most economists had predicted GDP would rise by 0.1%.

Ms Reeves blamed global economic uncertainty and insisted the UK needs to go “further and faster” to “kickstart economic growth to deliver on our plan for change”.

She said: “The world has changed and across the globe we are feeling the consequences.”

But it leaves her under huge pressure over how she’ll try to reverse the situation in her spring statement on March 26.

It unleashed a torrent of criticism from the left and the right.

Shadow chancellor Mel Stride said: “It is no surprise that growth is down again, following near no growth in the last three months of 2024. After consistently talking Britain down, raising taxes to record highs and crushing business with their extreme employment legislation, this Government is a growth killer.”

He warned that she “must think again or hard-working people will continue to pay the price” ahead of the spring statement.

Liberal Democrats Treasury spokeswoman Daisy Cooper said: “The Chancellor’s wretched budget has left our economy on life support so the spring statement must deliver a much-needed shot in the arm.”

She called for her to put forward a new plan “that unleashes the growth potential of small businesses up and down the land”.

Suren Thiru, of the Institute of Chartered Accountants in England and Wales, warned that the UK’s “economic performance may have been similarly downbeat in February”.

Capital Economics chief UK economist Paul Dales said: “With the prospect of higher taxes from April having left business sentiment on the floor and the global backdrop deteriorating, the economy is unlikely to strengthen much from here”.

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