UK economy shrank in January: Positive Money response

London, 14 March 2025 - Positive Money responds to today’s estimates from the Office for National Statistics (ONS) that UK GDP fell by 0.1% in January 2025.

Ellie McLaughlin, Senior Policy and Advocacy Manager at Positive Money, said: 

"The government's growth ambitions will not be achieved by cuts to welfare payments that support the most vulnerable, or to green investment projects that will lower bills and make our economy more resilient in the face of accelerating climate impacts and geopolitical tensions.

“If the Chancellor is looking for ways to meet her fiscal rules in the upcoming Spring Statement, she should look at taxing wealth, and industries that have seen unearned windfalls - such as banks, who have made record profits that the Treasury is footing the bill for due to the tens of billions in interest being paid to them by the Bank of England.

“We also must remember that these fiscal rules are ultimately self-imposed, and clearly are not fit for purpose if they leave crucial long-term investments in society and the environment subject to fluctuations in monthly growth figures.”

Notes:

• The ONS’ latest monthly growth estimate can be found here: https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/january2025  

• New figures from the Bank of England show up to £150bn could be paid out from the Government by 2030 to cover losses from unwinding QE. This amounts to roughly £30 billion a year in transfers from the Treasury to the Bank of England over the next five years, according to the Bank’s latest projections: https://www.bankofengland.co.uk/asset-purchase-facility/2024/2024-q4 

• In 2024, Britain’s four biggest banks made a record £45.9 billion in pre-tax profits. Positive Money worked out that a windfall tax on these profits could bring in nearly £15bn for public spending: https://positivemoney.org/press-release/windfall-tax-on-bank-profits-could-raise-ps15bn/ 

About Positive Money:

Positive Money is an international research and campaign organisation working to redesign our economic system for social justice and a liveable planet. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of supporters. Find out more: www.positivemoney.org