UK economy grows in Q1 but March drop underscores fragility
Britain’s economy grew by 0.1% in the first three months of 2023, a period that was once expected to be part of a long recession, but an unexpectedly sharp 0.3% drop in March underscored how fragile its recovery remains.
Economists polled by Reuters had mostly forecast 0.1% quarterly growth, but they had expected output to hold steady in the final month of the quarter.
“The fall in March was driven by widespread decreases across the services sector,” said Darren Morgan, from the Office for National Statistics.
“Despite the launch of new number plates, car sales were low by historic standards – continuing the trend seen since the start of the pandemic – with warehousing, distribution and retail also having a poor month.”
Widespread industrial action also weighed on economic activity in the quarter, the ONS said.
Britain’s economy remained 0.5% smaller than in the fourth quarter of 2019, shortly before the coronavirus pandemic – a weaker rebound than any other major advanced economy.
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