UK economic system shrank 0.3% in March, ONS figures present

The UK economic system grew barely within the first three months of the yr, in accordance with official figures – however contracted in March.

Growth of 0.1% was recorded by the Office of National Statistics (ONS) within the three months as much as March, the bottom quantity attainable to nonetheless be classed as progress as IT and building sector exercise offset the influence of strikes.

However, the economic system shrank 0.3% in March as retail and automotive gross sales fell sharply, and public sector strikes had been extra disruptive than February as NHS workers and academics took to picket strains.

Contraction additionally got here due to a 0.5% fall in companies manufacturing. Distribution and retail additionally had a poor month as value of residing pressures hit customers.

Economic analysis agency Pantheon Macro has identified the UK is falling under the G7 group of the world’s largest economies.

“The UK remains the only G7 country in which the main quarterly measure of GDP has not recovered to its pre-COVID peak yet; it still was 0.5% below its Q4 2019 level in Q1,” the Pantheon Macro chief economist stated.

“This chiefly reflects weakness in households’ real spending, which was 2.3% below its Q4 2019 level. But at least the magnitude of the underperformance is not increasing relative to other countries in Europe, which have faced a similarly enormous energy price shock,” Samuel Tombs stated.

ONS publishes GDP information each month, which stands for gross home product and measures the sum whole of the whole lot produced within the economic system.

Higher financial progress brings elevated tax revenues and sure greater incomes and requirements of residing.

As a part of his deal with financial progress, Prime Minister Rishi Sunak says rising the economic system will create better-paid jobs and alternatives throughout the nation.

A 3-month interval, or quarter, of financial progress means the UK is on the trail to keep away from recession. But the expansion recorded is small.

An economic system is technically in a recession after two quarters of unfavorable financial progress, although the Bank of England now expects the UK will keep away from recession this yr.

Today’s announcement adopted a flatlining economic system in February and progress of 0.5% in January.

In response to the figures, Chancellor Jeremy Hunt stated: “It’s good news that the economy is growing but to reach the government’s growth priority we need to stay focused on competitive taxes, labour supply and productivity.

“The Bank of England governor confirmed yesterday that the funds has made an necessary begin however we are going to hold going till the job is completed and we have now the excessive wage, excessive progress economic system we want.”

Rachel Reeves MP, Labour’s shadow chancellor of the Exchequer, responding to the latest GDP forecast today, said: “Labour needs to match the ambition of the British folks – whereas the Tories would quite proceed down a path of managed decline of low progress and excessive taxes.

“Despite our country’s huge potential and promise, today is another day in the dismal low growth record book of this Conservative government.

“The information stay that households are feeling worse off and we’re lagging behind on the worldwide stage.

“Labour’s mission to secure the highest sustained growth in the G7 will make families across every part of our country better off.”