UK economy ‘at risk of stalling’ after February slowdown – business live |
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UK economic growth slowed by more than expected in February, with Britain’s industrial output dropping as manufacturers struggled to obtain parts.
UK GDP rose by just 0.1% in February, new figures from the Office for National Statistics shows, with activity at Covid-19 Test and Trace and vaccination rollout programmes dipping.
That followed 0.8% growth in January, and is below the 0.3% February growth which economists expected. It leaves the economy around 1.5% larger than two years earlier, just before the UK’s first lockdowns.
The ONS reports that the services sector was the main contributor to growth in February, expanding by 0.2%, after England’s ‘Plan B’ restrictions were lifted at the end of January.
Ths was driven by tourism-related industries, after the scrapping of coronavirus testing for double-vaccinated travellers arriving in the UK from mid-February, in time for the half-term holidays.
The ‘travel agency, tour operator and other reservation services’ sector saw a 33% rise in activity, and accommodation grew 23%.
But human health activities dropped (down 5.1%), due to a fall in activity at NHS Test and Trace and vaccination activity after a busy December and January.
The production sector suffered a 0.6% drop in activity, while construction dipped by 0.1%.
Manufacturing was the main driver of negative growth in the production sector , falling by 0.4% in February 2022, the ONS says.
Car production, which has suffered from the shortage of semiconductors, saw output fall over 5%.
Contractions of 5.4% in manufacture of transport equipment (driven entirely by the fall in manufacture of cars), 4.3% in manufacture of computer, electronic and optical products, and 5.0% in manufacture of chemicals and chemical products were slightly offset by manufacture of basic pharmaceutical products and pharmaceutical preparations, which saw growth of 9.8%.
It leaves monthly GDP 1.5% above its pre-Covid-19 levels of February 2020.
Services is now 2.1% above its pre-coronavirus level, while construction is 1.1% above and production is 1.9% below, the ONS reports.
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