According to the Office for National Statistics (ONS), the British economy showed no growth in February.
GDP stalled at 0.0 percent in February, below the expected 0.1 percent growth.
According to the ONS, the largest contributors to the decline in services in February 2023 were education, public administration and defense, and mandatory social security, both sectors where strikes occurred in February.
Reduced electricity and gas consumption caused by unusually warm weather is also believed to have contributed to the lack of growth.
The decline in services (-0.1% after rising 0.7% in January) and manufacturing (-0.2% after falling 0.5% in January) was offset by balanced growth, as ONS analysis shows, in construction (2.4%).
Consumer services production grew by 0.4 percent, with retail being the largest contributor to this growth.
The broader stagnation came after higher-than-expected GDP growth of 0.4 percent in January.
Analysts had expected GDP to rise 0.1% m/m in February, according to Pantheon Macroeconomics consensus.
Darren Morgan, director of economic statistics at ONS, said: “The economy as a whole did not grow in February. Construction has grown strongly since the unsuccessful January, with a lot of renovation work. There was also growth on the retail side, with many stores having a good month.
“This was offset by the impact of civil servants’ and teachers’ strikes affecting the public sector, and unusually warm weather led to a drop in electricity and gas consumption.”
Chancellor Jeremy Hunt said: “The economic outlook looks better than expected – GDP rose in the three months to February and we are poised to avoid a recession with the steps we are taking through a huge support package for family living expenses. undertaken and radical reforms to stimulate the labor market and business investment”.
For now, the UK is narrowly avoiding a slide into recession, which occurs when the economy contracts for two consecutive quarters. Overall, in the three months to February, GDP grew by 0.1 percent.
According to the ONS, GDP must fall below 0.6% in March for the economy to show negative growth in the final quarter.
Shadow Chancellor Rachel Reeves said despite the UK’s huge prospects and potential on the global stage, the UK is still lagging behind as there is growth on the ground.
“The reality of continued growth is that households are deteriorating, shopping streets are deteriorating and the economy is weakening, leaving us vulnerable to shocks,” she added.
“It is because of these results that Labor’s mission of delivering the highest sustainable growth in the G7 is so important – it is the level of ambition we need to strengthen our economy, our high streets, to thrive again and improve families in all parts of Britain.”
Source: I News
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