UK economy FALLS by 0.1% as recession fears loom in cost of living crisis
THE UK economy has fallen by 0.1% as fears over a looming recession grow amid a crippling cost of living crisis.
Official figures show that the gross domestic product (GDP) fell by 0.1% in March.
And estimates from last month have been revised down as well.
ONS experts said the economy inched up by just 0.1% in February – but they marked this down today to no growth.
The Office for National Statistics (ONS) measures GDP monthly and it shows if the economy is growing or not.
It’s important because a higher rate of growth means there will more likely be an increase in jobs of offer, pay rises, and more money to invest in keeping the country up and running.
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A fall in the services sector was the main reason for the shrink in March, decreasing by 0.2%, the ONS said.
The wholesale sector – which include companies who sell large amounts of goods to retailers at low prices – and retail too fell by 15.1%.
However, the UK economy did increase slightly for the first quarter of the year – between January to March – and was up by 0.8%.
That is still lower than what economists were predicting. Experts estimated that the economy would grow by 1% over the first three months of the year.
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Darren Morgan, director of economic statistics at the ONS, said: “Our latest monthly estimates show GDP (gross domestic product) fell a little in March, with drops in both services and in production.”
He added that looking at the first three month of the year, the UK economy’s slight growth was “the lowest for a year”.
It comes as fears are growing over a possible recession.
Experts have predicted that economic growth will slow this year as inflation rockets and the cost of energy, fuel, food and transport goes up.
The government’s Office for Budget Responsibility cut its forecast for growth in 2022 to 3.8%, down from its previous forecast of 6%, set in October.
Quilter Investors portfolio manager Hinesh Patel said “things are only going to get worse for consumers” as the cost of living crisis gathers pace.
He added: “Energy bills are expected to soar again later this year when the price cap is reassessed, while inflation is proving stickier than expected.
“The Bank of England has a near impossible task of managing the economy out of this quagmire.”
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