© Reuters. FILE PHOTO: The City of London financial district is seen as people walk over Millennium Bridge in London, Britain, February 16, 2022. REUTERS/Henry Nicholls
By David Milliken
LONDON (Reuters) – Growth in Britain’s economy slowed more sharply than expected in February as gross domestic product rose by 0.1%, official figures showed on Monday, down from 0.8% growth in January.
The expansion was less than a 0.3% increase forecast in a Reuters poll of economists.
Britain’s economy in February was 1.5% larger than it was two years earlier, just before the country was hit by the COVID-19 pandemic, the Office for National Statistics said.
Britain’s economy shrank more than 9% in 2020, its biggest annual fall since just after World War One, but rebounded sharply in 2021 and suffered only a modest hit from the Omicron variant of coronavirus in December
However, economists have downgraded their growth forecasts for 2022 due to a surge in inflation caused by rising energy and commodity prices — partly linked to the war in Ukraine — as well as ongoing supply-chain difficulties since the pandemic.
Last month the government’s Office for Budget Responsibility cut its forecast for growth in 2022 to 3.8% from 6.0% in its previous forecast in October, predicting that inflation would hit a 40-year high of 8.7% later this year.
Britain’s dominant services sector drove monthly growth in February – boosted by travel and tourism – while industrial output fell by 0.6% on the month reflecting falls in car production and other areas due to component shortages.