Data from the Office for National Statistics (ONS) has shown that the UK’s economy failed to grow as anticipated in February. However, an increase in January was stronger than previously thought, meaning that a recession is less likely to be on the horizon for early 2023. The ONS revealed that economic output in February was static in comparison to the previous month.
The services sector, which is vast, contracted by 0.1% in February. This was due to strikes by teachers and other public sector workers. However, the slump was balanced out by a rebound in the construction sector, which is much smaller. The increase in construction output can be attributed to a recovery in February after bad weather disrupted the industry in January, particularly in new work, and a surge in maintenance and repair work.
The ONS revised the monthly growth rate of the economy in January to 0.4%, from an initial estimate of 0.3%. According to the Bank of England, the economy would need to have shrunk by 0.6% in March to indicate a contraction in the first quarter as a whole. The finance minister, Jeremy Hunt, stated that the data demonstrated that the UK’s economic performance had been more resilient than expected.
Chief economist at KPMG UK, Yael Selfin, pointed out that the UK economy could avoid a recession this year due to the upward revisions in GDP data and an improvement in global economic conditions. Although this would provide some relief for policymakers, the outlook for growth in the medium-term is still relatively weak when compared to historical standards.
Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.