UK GDP growth slows

Date : 12 May 2022

The ONS has released its latest monthly GDP estimate, raising concerns of a recession over 2022.

UK economic output fell by -0.1% over March, down from 0.1% in February. The UK economy is now 1.2% larger than its pre-pandemic level.

The leading contributor to growth in March was the construction sector, up 1.7%, boosted by rises in repair and maintenance activities and new work.

The services and production sector were both down 0.2% as the impacts of the cost of living began to bite.

Wholesale and retail trade was the largest negative contributor, down 2.8% over the month. This was primarily driven by a 15.1% fall in the trade and repair of motor vehicles and motorcycles, due to supply chain issues in the automotive industry.

A largest growth contributor was increased activity (2.1%) in human health activities, reflecting a rise in GP appointments and accident and emergency care.

This latest monthly estimate signals that the economic recovery from the COVID-19 pandemic is over as the economy grapples with declining shopper confidence and supply chain issues.

The concern for policy makers is that larger contractions over the coming months are expected once increases in utility bills and taxes are factored in.

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