UK GDP for the first three months of 2023 saw growth of 0.1%, figures out today showed.
March saw a contraction of 0.3% as strike action, cost-of-living pressures and the weather were all contributing factors.
Danni Hewson, head of financial analysis at AJ Bell, comments on the latest UK GDP figures: “Let’s be clear, whilst the Bank of England may believe the UK economy will now avoid the predicted recession entirely, the country is not in good health.
“Rising prices, rising interest rates and strike action have created a cocktail that’s pretty unpalatable.
“Sluggish is the term that’s been used to describe the 0.1% growth the economy managed to eke out over the first three months of year, but for businesses and the cash strapped consumer such listless forward momentum will probably feel a lot like no momentum at all.
“And in fact, taking March in isolation the picture looks even more gloomy than the weather that was blamed for terrible retail sales, with GDP falling by 0.3% for the month.
“Inflation has taken its toll, many budgets have been slashed to the bone and sector after sector is facing industrial action as workers chase a few pennies more just so they can keep their heads above water.
“Although inflation is expected to fall over the coming months, there are lingering concerns about food prices and of course falling inflation doesn’t mean falling prices.
“Discontent remains, more strike action is taking place today and whilst the bank holidays have been a welcome respite for many, they are likely to have impacted GDP.
“But the economy, fragile as it is, has also proved remarkably resilient.
“The question is of course, if we have only felt the impact of the first third of interest rate hikes how will households fare when the rest of those effects filter through?
“If growth is the answer it looks like we are all going to have to wait a bit longer until things start to turn around.”