Britain's economy grew sluggishly in early 2023, better than the shallow recession once expected, but an unexpectedly sharp drop in output in March underscored how fragile its recovery remains.
Gross domestic product edged up 0.1% in the first three months of the year, official data showed on Friday, the same tepid pace as in the final quarter of 2022 and in line with economists' forecast in a Reuters poll.But GDP in March alone dropped 0.3%, compared with poll forecasts for it to hold steady. While industrial output and construction grew, the much larger services sector dropped 0.4%, reflecting weak car sales and retail, hurt by unusually rainy weather and high inflation.
Britain's inflation rate topped 10% in March - double the level in the United States and higher than the euro zone's too - and on Thursday theThe jump in inflation largely reflects the ongoing impact of a surge in the cost of natural gas imports and foodstuffs last year after Russia's invasion of Ukraine, which the BoE says has made Britain poorer.
People browse stalls at a street market in east London, Britain, February 4, 2023. REUTERS/Henry NichollsFinance minister Jeremy Hunt said Friday's data showed "growth is picking up much faster than anyone thought possible" but the government needed to "stay focused on competitive taxes, labour supply and productivity".
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