The UK economy contracted by 0.1% in March as consumers began to feel the bite of rising energy prices and the cost of living.
The latest data comes after a period of lack of growth in February. During the period, services decreased by 0.2% compared to the month and had a major contribution to the decline in GDP in March, reflecting a large decline (15.1%) in wholesale and retail trade and repair of motor vehicles and motorcycles industry.
Production also decreased compared to the month by 0.2%; these declines were partially offset by construction, which increased by 1.7%.
Production of consumer services fell by 1.8% in March 2022, after growing by 0.5% (revised downwards by 0.7%) in February 2022; non-consumer services increased by 0.2% compared to the month after falling by 0.1% in February (revised downwards by 0.0%).
However, GDP grew by 0.8% in the three months to March 2022. Services made a major contribution in the three months to March, contributing 0.4 percentage points, while manufacturing and construction contributed 0.2 percentage points each.
Monthly GDP is already 1.2% above its level before the coronavirus pandemic (COVID-19) (February 2020).
Services are already 1.5% above pre-coronavirus levels, while construction is 3.7% above and production is 1.6% lower; within services, consumer services were 6.8% below pre-coronavirus levels in March 2022, while all other services were 3.6% higher.
“Pressure on costs and rising prices tightened their grip, with businesses and households feeling a pinch. The end result is a weaker economic outlook. “
She added: “It is clear that the most vulnerable households and energy-intensive businesses may need additional support, so the government needs to keep this under control.
“But the only way to build a sustainable economy that can withstand price shocks is a relentless focus on growing productivity and potential output. Business is the solution for both, so it needs to be adequately supported to invest and grow. ”