UK economic growth slows, raising recession concerns
May 12, 2022, 1:50 AM | Updated: 2:01 am
LONDON (AP) — Britain’s economy grew at the slowest pace in a year during the first quarter as retailers and manufacturers were hurt by supply disruptions and higher prices, raising concerns that the country may be headed for a recession.
Gross domestic product, the broadest measure of economic activity, rose 0.8% in the period, slowing from 1.3% in the previous quarter, the Office for National Statistics said Thursday. Monthly estimates indicate GDP shrank by 0.1% in March.
The figures “suggest the economy had less momentum than we thought even before the full hit from the cost of living crisis has been felt,” said Paul Dales, chief U.K. economist at Capital Economics. “The risk of recession has just risen.”
Growth is slowing as manufacturers and retailers struggle to overcome supply bottlenecks following the COVID-19 pandemic and the war in Ukraine fuels rising food and energy prices. Retail sales figures show British consumers are already reducing spending as economists forecast the U.K. will see the biggest drop in living standards in more than six decades this year.
Thursday’s figures underscore how the U.K.’s recovery from the pandemic has slowed over the past year.
Four straight quarters of economic growth mean GDP is now back above pre-pandemic levels for the first time, the ONS said.
But the first-quarter growth rate was the slowest since the first quarter of 2021, when the economy expanded 5.6%.
Treasury chief Rishi Sunak blamed the slowdown on Russia’s invasion of Ukraine and “other global challenges,” noting that Britain’s economy is still growing faster than those of the U.S., Germany and Italy.
“The U.K. economy recovered quickly from the worst of the pandemic and our growth in the first few months of the year was strong … but I know these are still anxious times,” he said in a statement.
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