The UK’s overall GDP grew at a rate of just 0.1 per cent during February, according to the latest economic output data from the Office for National Statistics (ONS).
Economists had forecast stronger growth for the month but the slowing pace of manufacturing output in particular is being cited as a reason why the latest figures are below expectations.
Among the issues being highlighted within the economy at present are the supply chain challenges of manufacturers, including carmakers particularly, many of whom are understood to be facing serious difficulties sourcing key components.
The headline GDP growth rate of 0.1 per cent for February represents a cooling of the pace of expansion across the economy from 0.8 per cent in January.
That relatively strong growth in January was attributed in part to a rebound of activity after the worst weeks of the Omicron Covid wave, which receded in the early part of this year.
Activity among tourism operators is understood to have rebounded particularly strongly in January and February but manufacturing and production sectors have seen their operations hampered in recent weeks by supply chain issues.
With inflationary pressures mounting on households and businesses across the country, some economists are concerned that GDP growth rates could head into negative territory in the coming months.
“The news that the economy was hardly growing at all in February suggests the economy had a little less momentum in the first quarter than we had previously thought,” commented Ruth Gregory, senior UK economist at the consultancy firm Capital Economics.
“It increases the risk of a contraction in GDP in the coming months as the squeeze on household real incomes intensifies,” she added.
Suren Thiru from the British Chambers of Commerce (BCC) has suggested that the ONS’ numbers for February show that the UK economy was already struggling for growth prior to Russia’s invasion of the Ukraine.
“February’s slowdown is likely to be the start of a prolonged period of considerably weaker growth as rising inflation, surging energy bills and higher taxes increasingly damages key drivers of UK output,” he said.
“The government must provide urgent financial support, through the expansion of the energy bills rebate scheme, to include small firms and energy intensive businesses.”