UK economy flat in February as strikes and inflation bite — and the IMF delivers reality check

by | Apr 13, 2023 | Financial

LONDON — The U.K. economy flatlined in February as widespread industrial action and persistently high inflation stymied activity.Data on Thursday showed a steady GDP in February, missing consensus expectations of 0.1% growth. Both the services and production sectors contracted, partly offset by a record 2.4% expansion in construction. This followed an upwardly revised 0.4% expansion in GDP in January, which means output grew by 0.1% in the three months to the end of February.Large-scale strike action has been carried out in recent months by teachers, doctors, civil servants and rail workers, among others — members of the sectors that were the largest contributors to the fall in February services output.”There was anecdotal evidence, reported on monthly business survey returns, to suggest that industrial action in February 2023 had a notable impact on different industries of varying degrees,” the Office for National Statistics said Thursday. “These included the health sector (nurses and the ambulance service), the civil service, the education sector (teachers and university lecturers) and the rail network.”Jeremy Hunt, UK chancellor of the exchequer, holding the despatch box as he stands with treasury colleagues outside 11 Downing Street in London, UK..Bloomberg | Bloomberg | Getty ImagesIn response to the figures, British Finance Minister Jeremy Hunt insisted that the country’s outlook was “brighter than expected,” stressing that the U.K. is “set to avoid recession thanks to the steps we have taken,” according to multiple news outlets.The independent Office for Budget Responsibility no longer expects the U.K. economy to enter a technical recession in 2023 — …

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