UK economy shrank 0.1% in March

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The figures will increase fears that Britain is heading for another recession as a result of the cost-of-living crisis

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T

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he economy went into reverse in March for the first time since the end of last year as hard stretched consumers began reining in their spending.

GDP dropped by 0.1 per cent in the month, leaving growth for the first quarter of the year at just 0.7 per cent.

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The figures from the Office for National Statistics will increase fears that Britain is heading for another recession as a result of the cost-of-living crisis.

GDP was last negative in December when the Omicron variant of the coronavirus hit at the peak of the party season just before Christmas.

The Government had hoped for a strong bounce after virtually all pandemic restrictions were lifted in February but the Russian invasion of Ukraine has sent energy and food prices soaring.

The knock to consumer confidence has already damaged high street spending with retail sales slumping in April.

The Bank of England warned last week that growth is likely to peter out this year and could go into recession next year. It is forecasting a 0.25 per cent fall in GDP in 2023.

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Credit: www.standard.co.uk /

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