Economic growth slowed more than expected in February, despite a surge in January of holiday bookings as coronavirus restrictions eased.
The Office for National Statistics said gross domestic product rose by 0.1% in February, down from a monthly growth of 0.8% in January as the economy began recovering from a wave or Omicron infections. City economists had forecast a monthly growth rate of 0.3%.
Commenting on the latest ONS GDP figures for February 2022, published today, Phil Smith, Managing Director of Business West said:
“We know from our recent survey of over 400 businesses that nearly half of respondents have increased their prices over the last 3 months – up 8 points from last quarter. While economic output marginally strengthened in February, the significant slowdown in growth shown in the ONS report, combined with the pressure on firms to rise prices shows the UK economy was faltering even before the impact of Russia’s invasion of the Ukraine.
“While tourism related industries and accommodation services recorded the strongest improvements, growing by 0.2%, as coronavirus restrictions ended and concerns over Omicron reduced, thereby supporting activity; this was significantly offset by production, which fell by 0.6% and construction, which fell by 0.1%.
“Firms are now being hit with rising supply chain and wage inflation, surging energy bills, and higher taxes which will damage UK output including consumer spending.
“The government must provide urgent financial support to businesses by expanding the energy bills rebate scheme, taking into consideration small firms and particularly energy intensive businesses.”
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