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UK economy saw no growth in January ahead of Iran war turmoil

The UK economy saw zero growth in the first month of the year – before global markets were rocked by the outbreak of war in the Middle East. Fresh figures from the Office for National Statistics (ONS) have handed a major blow to Rachel Reeves with the economy flat in January, compared to the 0.2 [...]

Mar 13, 2026 &03101313202631; 07:10 UTC www.cityam.com Trending 5/5

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Negative for markets

Sentiment score: -65/100

High impact Short-term (days)

WHAT THIS MEANS

UK economy stalled with zero growth in January 2025, preceding Middle East geopolitical tensions that have since roiled global markets. This disappointing economic data undermines Chancellor Rachel Reeves' growth agenda and signals potential headwinds for UK fiscal performance amid escalating international instability.

AI CONFIDENCE

85% Very high

SENTIMENT GAUGE

NEWS POWER SCORE

AFFECTED ASSETS

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British Pound / US Dollar

GBPUSDCurrency

Expected to decline

Weak UK economic data reduces interest rate expectations and dampens GBP demand

↓

FTSE 100 (London)

^FTSEIndex

Expected to decline

UK economic stagnation pressures domestic equities; geopolitical risk adds downside

⇅

Euro Stoxx 50

^STOXX50EIndex

High volatility expected

European exposure to Middle East tensions combined with UK economic weakness creates uncertainty

↑

Oil (WTI Crude)

CL=FCommodity

Expected to rise

Iran war turmoil drives crude oil prices higher amid supply disruption concerns

↑

Gold Futures

GC=FCommodity

Expected to rise

Safe-haven demand from geopolitical escalation supports gold prices

PRICE HISTORY

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⚡ SUGGESTED ACTION

Consider reducing UK equity exposure and GBP longs; increase allocation to safe-haven assets (gold, bonds) and energy commodities. Monitor BOE policy response to weak growth data combined with inflation pressures from oil price spikes.

KEY SIGNALS

UK economic stagnation signals recession riskMiddle East conflict escalation creates geopolitical premiumSafe-haven asset demand increasingSterling weakness likely to persistBOE rate cut expectations may increase

SECTORS INVOLVED

Financial ServicesConsumer DiscretionaryEnergyUtilities

Analysis generated on Mar 16, 2026 at 15:25 UTC

Disclaimer: This analysis is generated by artificial intelligence for informational purposes only and does not constitute financial advice, investment recommendation, or solicitation. Original reporting by City AM. Always conduct your own research and consult a qualified financial advisor before making investment decisions.

UK economy saw no growth in January ahead of Iran war turmoil

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