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Daily Record
Daily Record
Politics
Chris McCall

UK recession fears grow as rising inflation set to leave more Scots struggling

The UK economy shrank in March as people began to reign in their spending amid the growing cost of living crisis.

Official figures showed the economy contracted by 0.1 per cent in March after no growth in February - sparking fears the country could be heading into recession.

Tory-imposed tax rises and rising fuel bills have been blamed for consumers spending less.

The Bank of England hiked in interest rates to a 13-year high of one per cent last week to try to curb inflation and warned the economy was set to stall in the second quarter.

Alison Thewliss, SNP spokeswoman on the economy, today warned the UK Government "has absolutely no plans to deal with this."

"Growth is flatlining, and the Bank of England predicts growth is going to flatline for many years.

"That's really quite worrying as the UK Government plan is to grow our way out of this.

"They seem to have no plan to grow the economy - and that should worry all of us, particularly when costs are rising in the shops, when fuel is rising, when energy bills are soaring, and when inflation is set to rise as well.

"The National Institute of Social and Economic Research predicted yesterday that RPI inflation could hit 14-and-a-half per cent next year.

"That's really quite stark - and the UK Government has absolutely plans to deal with this."

Chancellor Rishi Sunak said UK first quarter growth was faster than the US, Germany and Italy.

But added: "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,” he said.

The figures showed the wind down of the coronavirus test and trace programme weighed on first quarter growth.

In March, the decline was led by a 0.2 per cent fall in output from the all-important services sector, with consumer-facing services down 1.8 per cent in a sign of the pressure already being felt among households.

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