The UK economy unexpectedly contracted to 0.1% in March, weakened by the risk of a recession in the first quarter of the year as car sales fell due to supply chain problems.
GDP (GDP) rose 0.8% in the first three months of 2022, down 0.9% from the central bank’s forecast and 1% lower than expected in a Reuters poll, according to the National Statistics Office.
Although lower than expected, the expansion between January and March is expected to mark a high point for this year, with consumer spending under the biggest pressure for decades.
Last week, the Bank of England forecast inflation to rise above 10% in the last quarter of the year against the 2% target, up from 7% in March.
“Our recovery has been hampered by the brutal invasion of Ukraine (Russian President Vladimir) Putin and other global challenges, but we will continue to help the people as much as we can,” Finance Minister Rishi Sunak said after the data was released on Thursday.
The United Kingdom, unlike its European neighbors, has limited direct economic relations with Russia, but has been hit hard by rising energy prices in Europe.
On a monthly basis, GDP is now 1.2% higher than the pre-February 2020 Govt. However, most recovery reflects higher health care costs – 11% since the onset of the epidemic – while consumer services are still down 7%. Pre-Kovit position.
In March alone, sales of cars and motor vehicles fell 15.1%, leading to a 0.2% drop in overall service output.