There are growing fears that the cost-of-living crisis may plunge the UK into recession. Official figures have shown Britain’s economy grew at the slowest pace for a year at the start of 2022.
The Office for National Statistics (ONS) said gross domestic product (GDP) rose by 0.8% between January and March, down from growth of 1.3% in the previous three months and the weakest since the first quarter of last year. The figures showed that on a monthly basis, GDP fell by 0.1% in March after growth stalled in February and rose by 0.7% in January.
While the expansion means GDP is now 0.7% above levels seen before the pandemic struck, the figures are likely to mark the calm before the storm as warnings are growing over a recession in the UK as the cost-of-living crisis deepens.
Darren Morgan, director of economic statistics at the Office for National Statistics (ONS), said: “The UK economy grew for the fourth consecutive quarter and is now clearly above pre-pandemic levels, although growth in the latest three months was the lowest for a year. This was driven by growth in a number of service sectors as the economy continued to recover from Covid-19 effects, including hospitality, transport, employment agencies and travel agencies. There was also strong growth in IT.”
He added: “Our latest monthly estimates show GDP (gross domestic product) fell a little in March, with drops in both services and in production. Construction, though, saw a strong month, thanks partly to repair work after the February storms.”
Chancellor Rishi Sunak said: “The UK economy recovered quickly from the worst of the pandemic and our growth in the first few months of the year was strong, faster than the US, Germany and Italy, but I know these are still anxious times. Our recovery is being disrupted by Putin’s barbaric invasion of Ukraine and other global challenges, but we are continuing to help people where we can.
“Growth is the best way to help families in the longer-term, so as well as easing immediate pressures on households and businesses, we are investing in capital, people and ideas to boost living standards in the future.”
Shadow levelling up secretary Lisa Nandy said money is being “sucked out of communities” and this is playing out in the slower growth seen in Thursday’s GDP figures. She said levelling up is “all the more important and even more crushing that we’ve had two years of big promises from the Government but no real action”.
She added: “We’ve just released figures this morning which show that a billion pounds has been stripped out of the English regions, money that was promised to us by the Government that then would replace … that we used to receive via the European Union, but no longer do. This is causing an absolute crisis around the country because if we strip money out of people’s pockets, if you suck money out of communities, that people don’t spend, the economy doesn’t grow and businesses don’t thrive.
“That’s what we’re seeing playing out in these GDP figures this morning, but it’s also what we’re seeing playing out in the crisis that is engulfing families and businesses.”
