GDP fell by 0.1% in March 2022
16th May 2022
The UK economy contracted by 0.1% in March 2022 after no growth in February 2022, dampening outlooks on the country's economic recovery post-Covid.
A contraction in the services sector was the main contributor to March's fall in GDP, reflecting a large decrease (15.1%) in the wholesale and retail trade and repair of motor vehicles and motorcycles industry.
While monthly GDP is now 1.2% above its pre-pandemic level in February 2020, the cost of living crisis and inflation squeeze have dampened prospects of future recovery.
Meanwhile, quarterly GDP growth was just 0.8% in the three months to March 2022, prompting fears the economy could go into a stagnation or even recession in the future.
Indeed, the Bank of England recently said that it expects the level of GDP to be "broadly unchanged" in Q2 2022.
It also expressed concern that the UK economy might slide into recession this year as higher energy prices push inflation above 10%.
Julian Jessop, economics fellow at free market think tank the Institute of Economic Affairs said:
"[March's GDP figures are] bound to encourage fears that the economy is heading into recession and strengthen calls for an emergency Budget.
"Even if the UK avoids a technical recession (usually defined as two successive quarters of falling output), it will certainly feel like one for many households struggling to pay their bills."
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