Official numbers released showed that although the United Kingdom’s economy dropped by 0.1% in March, it grew by 0.8% in the first quarter of 2022, marking a high point for the year as the cost-of-living issue strikes harder.
Economists had predicted that gross domestic product (GDP) will remain unchanged in March and would expand by 1.0 % in the first 90 days of this year compared to the final quarter of 2021. The decline in GDP was driven by a 0.2% drop in output in the U.K.'s leading services sector.
For those unaware, the British economy declined by 9.3% in 2020 and then grew by 7.4% in 2021, the greatest production swing of any G7 country during the COVID-19 pandemic. Monthly, overall GDP is presently 1.2 % more than it was before the Coronavirus outbreak in February 2020.
However, experts believe that Britain is increasingly at risk of re-entering recession as the conflict in Ukraine exacerbates post-pandemic pressures, for which the Bank of England predicts that it will push inflation beyond 10% by the end of the year.
Meanwhile, Prime Minister Boris Johnson's government is facing significant pressure to provide more assistance to homes to combat rising electricity and other essential prices, which have already resulted in a near-record drop in consumer confidence, cited sources close to the matter.
The National Institute of Economic and Social Research, a reliable institution in the United Kingdom, has predicted that British GDP would decline in the third and fourth quarters of this year, matching the technical definition of a recession.
Additionally, the International Monetary Fund predicted last month that the United Kingdom would have the slowest growth and the greatest inflation of any major industrialized economy next year.