UK financial system flatlines with no progress in February as strikes hit productiveness

The UK financial system flatlined in February, with no progress in GDP, in line with official figures.

Civil service strikes and low power consumption offset progress in areas similar to building – which grew 2.4%, the Office for National Statistics (ONS) knowledge confirmed.

The flatlining was sudden. Economists polled by the Reuters information company had forecast slight progress of 0.1% for the month.

ONS figures confirmed companies manufacturing fell by 0.1% within the month, following progress of 0.7% in January 2023.

The largest contributor to destructive progress within the companies trade was training, which fell 1.7% in a month the place instructor strikes befell.

Another strikes hit sector, public administration, was the second largest contributor to destructive progress within the companies trade.

Construction grew because of restore works going down and retail output elevated as many outlets had a “buoyant month”, the ONS’s director of financial statistics, Darren Morgan mentioned.

Unseasonably gentle and dry climate led to lowered manufacturing of electrical energy and gasoline, Mr Morgan added. Output within the arts, leisure and recreation industries grew, nevertheless.

It adopted progress of 0.4% in January and affirmation the UK financial system averted recession within the second half of 2022 and really grew 0.1% within the closing three months of the 12 months.

The most up-to-date projections from the impartial financial forecaster, the Office for Budget Responsibility (OBR), mentioned the UK will keep away from recession – outlined as two consecutive quarters of destructive progress – in 2023, regardless of earlier predictions.

But the financial system will nonetheless shrink general this 12 months by an anticipated 0.2%, and the fiscal watchdog warned residing requirements are to fall by the most important quantity since information started.

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On a quarterly foundation, the financial system grew barely. In the three months to February, the ONS mentioned GDP, a measure of financial progress, elevated by 0.1%.

However, responding to the flatlining, Chancellor Jeremy Hunt remained upbeat concerning the figures.

He mentioned: “The economic outlook is looking brighter than expected – GDP grew in the three months to February and we are set to avoid recession thanks to the steps we have taken through a massive package of cost of living support for families and radical reforms to boost the jobs market and business investment.”

But Labour’s shadow chancellor Rachel Reeves criticised the federal government’s document on financial progress.

She mentioned: “Despite our enormous promise and potential as a country, Britain is still lagging behind on the global stage with growth on the floor.

“The actuality of progress inching alongside is households worse off, excessive streets in decline and a weaker financial system that leaves us weak to shocks.

“These results are exactly why Labour’s mission to secure the highest sustained growth in the G7 is so important – it’s that level of ambition that we need to strengthen our economy, get our high streets thriving again and make families across every part of Britain better off.”