Economic recovery slows, according to latest ONS figures
Economic recovery slows, according to latest ONS figures
Latest official figures showed that UK output slowed in February, a sign that the economic recovery was weaker than had been predicted, even before the surge in inflation triggered by Russia’s invasion of Ukraine.
Office for National Statistics numbers show monthly gross domestic product (GDP) expanded by just 0.1%. While tourism-related business bounced back as travel restrictions eased, there was a reduction in activity in the healthcare, industrial and construction sectors. Manufacturing slumped amid supply chain constraints that have left car producers and others struggling to source vital components and materials.
February’s minuscule growth was down on the 0.8% expansion recorded in January 2022, and was lower than analysts’ consensus forecast of 0.3%.
GDP is now 1.5% above its pre-pandemic level of February 2020, but there are growing concerns that the economy could slip into recession as pressure on consumer spending mounts. Household consumption is the largest element of expenditure across the UK economy, accounting for 59% of the total in 2021.
“The news that the economy was hardly growing at all in February suggests the economy had a little less momentum in Q1 than we had previously thought, and increases the risk of a contraction in GDP in the coming months as the squeeze on household real incomes intensifies,” said Ruth Gregory, senior economist at Capital Economics.
