By Andy Bruce and Suban Abdulla
LONDON, March 13 (Reuters) - Britain's economy stagnated unexpectedly in January and expanded weakly in preceding months, according to official data on Friday that showed only tepid growth during the lead-up to the U.S.-Israeli war in Iran.
The figures mean British gross domestic product has been essentially flat since June, ending January at the same level as six months earlier.
GDP rose during the three months to January by 0.2%, the Office for National Statistics said,
against expectations in a Reuters poll of economists for a 0.3% increase.
The flat reading for January alone also dashed the median prediction for a 0.2% month-on-month increase.
Sterling slipped against the U.S. dollar on the back of the figures, which showed no growth in the dominant services sector in January, against modest upticks in manufacturing and construction output.
Last month, the Bank of England said it expected the economy to grow 0.3% in the first quarter as a whole and 0.9% over 2026 as a whole - although that was before the conflict in Iran kicked off, prompting a surge in oil prices.
Earlier this week, finance minister Rachel Reeves said it was too soon to say how soaring energy prices would affect Britain's economy.
But investors see it as more exposed than other Western European economies due to its weak public finances, reliance on natural gas for electricity generation, and already high rates of inflation.
Financial markets no longer believe the Bank of England is likely to cut interest rates this year, and investors will be watching the central bank's communications carefully at next Thursday's interest rate announcement.
(Reporting by Andy Bruce and Suban Abdulla; editing by William James)
