Donald Trump’s tariffs are not responsible for the UK economy shrinking in January, Downing Street has said, in a position that appears to contradict the Chancellor’s reaction to the latest poor economic figures.

According to the latest set of gross domestic product (GDP) figures published by the Office for National Statistics (ONS), the economy shrank by 0.1 per cent in the first month of 2025.

Output was dragged down by a sharp drop in the production sector, the ONS reported, after growth of 0.2 per cent over the three months to the end of January.

Speaking this morning after the economic figures were unveiled, Chancellor Rachel Reeves said: “The world has changed and across the globe we are feeling the consequences.”

It comes after the US President has pursued an unpredictable tariff policy, hiking taxes on imports from allies Canada and Mexico and imposing steep hikes on goods from China, as well as global tariffs on metal and threatening 200 per cent taxes on EU alcohol imports.

UK economy

But in an apparent shift away from No 11’s position, when asked if the US president’s trade policy was to blame for the contraction in the economy, a No 10 spokesman told reporters: “No.”

He said: “We know the cost-of-living crisis is not over, and this government is determined to make people better off, and that’s why economic growth is the Prime Minister’s number one priority.

“Growth is what funds our public services, it is what enables investments in our hospitals and schools and, of course most importantly, raises living standards for everyone, everywhere.”

The spokesman reiterated that the government continues to engage with the US administration on tariffs, and insisted they were global and not targeted at the UK.

He added: “As we’ve said, we won’t be imposing tariffs immediately.