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 per cent in the period, slowing from 1.3 per cent in the previous quarter, the Office for National Statistics said Thursday. Monthly estimates indicate GDP shrank by 0.1 per cent 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 UK 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 UK will see the biggest drop in living standards in more than six decades this year.
Thursday’s figures underscore how the UK’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 per cent.
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 US, Germany and Italy.
“The UK 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.