UK GDP slows as cost of living crisis begins to weigh

The UK economy continued to expand in the first quarter, albeit at a slower pace than in the final quarter of 2021, and showed signs of slowing growth momentum in March as the cost of living crisis weighed on economic activity.

Britain’s gross domestic product grew 0.8% quarter on quarter in January-March, the Office for National Statistics said on Thursday, weakening from the 1.3% expansion recorded in the fourth quarter of 2021. Economists polled by the Wall Street Journal expected economic growth of 1%.

Growth in the first three months of the year was driven by a 0.6% increase in household consumption, partially offset by large movements in international trade flows, according to the ONS.

In March, the UK economy contracted a modest 0.1% month-on-month, suggesting momentum slowed further towards the end of the first quarter.

Economists expect the UK economy to slow further in the second quarter, with risks of a contraction increasing as higher prices and higher interest rates weigh on activity and weigh on consumer spending power.

Write to Xavier Fontdegloria at UK GDP slows as cost of living crisis begins to weigh

Brian Lowry

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