UK economy shrank in March as service industry struggles – POLITICO

The UK economy contracted by 0.1% in March, according to to data released Thursday by the Office for National Statistics.

The statement also said GDP stagnated in February, revised down from a preliminary estimate of 0.1% growth.

The collapse in March was due to weakness in wholesale and retail trade and consumer services, including the motor vehicle and motorcycle repair industry, the ONS said. Production also fell, although this decline was partly offset by an increase in construction. The UK economy is now 1.2% above pre-pandemic levels in February 2020.

“The UK economy has grown for the fourth consecutive quarter and is now clearly above pre-pandemic levels, although growth in the last three months has been the weakest for a year,” said Darren Morgan. , director of economic statistics at the ONS.

A range of service sectors, such as hospitality, transport and travel, had initially rebounded from the pandemic, Morgan said. But there were also “downward effects from other services, including retail, wholesale and car sales.” The healthcare sector also contracted as Britain’s “test and trace” system was scaled back.

Overall, UK GDP growth rose 0.8% in the first quarter of 2022. This was below analysts’ expectations of 1% and down from the 1% increase. 3% in the last quarter of 2021.