UK economy recession in March, growth of 0.8% in the first quarter of 2022
City of London, the capital of England. (Artwork: Alamy)
The UK’s National Statistics Office said gross domestic product grew 0.8 per cent in the first three months of 2022, lower than the Bank of England’s 0.9 per cent forecast and 1.0 per cent forecast. average opinion of economists interviewed by Reuters.
Although it fell short of expectations, cumulative growth from January to March is likely to mark a year-long high, with consumer spending tightening its biggest squeeze in decades.
Last week, the Bank of England forecast, inflation will be above 10% in the final quarter of the year, up from 7% in March, more than three times the 2% target set earlier.
“The economy has less momentum than we thought even before being hit by the cost of living crisis,” said Paul Dales, chief UK economist at Capital Economics.
Prime Minister Boris Johnson’s government is under pressure to give households more support to pay their electricity bills and other essentials, which have already sent consumer sentiment down. near record.
Bank of England headquarters in London, May 5, 2022. (Photo: AP)
“Our recovery is being disrupted by the Russia-Ukraine crisis and other global challenges, but we are continuing to help people as much as we can,” said UK Finance Minister Rishi Sunak.
Britain, unlike some of its European neighbors, restricts direct trade relations with Russia. However, the country is heavily affected by energy prices in Europe was high even before the war in Ukraine began on February 24.
The Bank of England has raised interest rates four times since December 2021 and is likely to continue raising rates this year to curb inflation.
British Economythe world’s 5th largest economy, shrank by a historic 9.3% in 2020 and grew by 7.4% in 2021, the strongest increase of any G7 economy during the COVID-19 pandemic .
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