(Alliance News) – Britain’s economy grew at the same pace as expected, data from the Office of National Statistics showed on Thursday, as the Bank of England warned of rising levels of inflation.
On an annual basis, UK gross domestic product grew 8.7% unchanged in the first quarter, accelerating from growth of 6.6% in the last quarter of 2021.
On a quarterly basis, the UK economy recorded unrevised growth of 0.8% in the first quarter, slowing from a 1.3% expansion in the fourth quarter.
“Our latest estimate of economic growth in the first quarter is unrevised as a whole, showing that the UK economy has continued to recover from the pandemic,” said the director of economic statistics at the ONS, Darren Morgan.
The rapid tightening of monetary policy to fight inflation raised fears that the UK economy could slide into recession – two consecutive quarters of negative growth.
Soaring inflation will hit Britain harder than any other major economy during the current energy crisis, the Bank of England has warned.
Governor Andrew Bailey said on Wednesday that Britain’s economy is likely to weaken sooner and be more intense than others due to the energy price shock that all European economies are facing.
The situation has been further exacerbated in Britain by the “structural legacy” left by Covid on the labor market as businesses struggled with a shortage of workers.
“Unfortunately there will be a further acceleration in inflation in the UK later this year because it is a product of how the energy price cap interacts with energy prices that we have seen over the past few months,” Bailey told a European powerhouse. Banking conference in Sintra, Portugal, on Wednesday. “I think the UK economy is probably weakening a bit earlier and a bit more than the others.”
Still, market participants widely expect the BoE to hike rates by half a percentage point at its next meeting in August – a move Bailey did not completely rule out on Wednesday, saying he there were “options on the table”.
By Arvind Bhunjun; [email protected]
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