UK economic growth slows to 0.1% in February

Despite a strong resurgence of both inbound and outbound tourism activity, including travel agencies, hotels and tour operators, the UK economy grew by just 0.1% in February.

But growth has slowed sharply since January, when the gross domestic product (GDP) grew 0.8% as people returned to normal life after the rate of Omicron increased in December 2021.

The figure of 0.1% for February is lower than the 0.3% growth predicted by most analysts.

Data from the Office for National Statistics (ONS) shows that monthly GDP is now 1.5% above the pre-epidemic level of February 2020.

But despite the growth in tourism, the decline in production has dragged down the economy, which has shrunk by 0.6% and construction by 0.1%, the ONS said.

Car production in particular has fallen sharply in recent months due to the ongoing chip shortage and the closure of the Honda plant in Sweden.

According to Darren Morgan, director of economic statistics at ONS, growth was also hampered by the decline in the NHS test and trace and immunization programs, which had a strong contribution to GDP at the beginning of the year.

The UK economy grew 7.4% last year to a record rebound from a devastating 2020, when it suffered its biggest annual collapse since World War I.

But last month, Rishikesh Sunak, Chancellor of the Exchequer, revised the UK’s 2022 growth forecast to 3.8%, down from 6% in light of rising living costs and rising fuel prices following Russia’s invasion of Ukraine.

In a statement on Monday following the release of the latest GDP figures, Mr Sunak said: “I welcome the positive growth seen across the economy in February, which continues to recover from the epidemic, boosted by the assistance we have provided.”

“Russia’s aggression in Ukraine is creating additional economic uncertainty here in the UK, but it is true that we are strongly opposed to Putin’s unprovoked invasion,” he said.

According to the Center for Economics and Business Research (CEBR), the average income of a UK family will fall by 2,553 this year, half of which is due to the invasion of Ukraine.

The prices we offer at supermarkets and petrol pumps are also expected to jump significantly.

The CEBR predicts that inflation will now peak at 8.7% in the next quarter and then double as expected by the second half of 2023. That means a shopping basket that cost 20 20 a year ago will cost about 22 22 in the next few months.

Severe storms Dudley, Eunice and Franklin, which hit the UK between 16 and 21 February, could also have an impact on economic growth, the ONS said.

“The majority of those who reported negative impacts were from the service industry, including accountancy, leisure parks and holiday centers, photography, hairdressing and beauty, leasing construction equipment, restaurants and takeways, and marquee rental,” said the report. .

“However, some businesses have reported positive effects on turnover, such as selling fences, torches and working on temporary off-grid power.”