The United Kingdom’s economy stalled in February due to widespread labour strikes and stubbornly high inflation.
Data showed that gross domestic product (GDP) was flat or unchanged in February, missing consensus expectations for 0.1% growth in the month. However, January’s GDP figure for the U.K. was upwardly revised to a 0.4% expansion.
National strikes by teachers, doctors, civil servants, and rail workers contributed to the decline in February’s economic output, said Britain’s Office for National Statistics.
British Finance Minister Jeremy Hunt did his best to put a positive spin on the latest GDP figures, saying the U.K. looks likely to avoid a recession in coming months.
The U.K. Office for Budget Responsibility has said that it does not expect the U.K. economy to enter a recession in 2023 — defined as two consecutive quarters of economic contraction.
However, many economists disagree with the government’s outlook, especially as the Bank of England aggressively hikes interest rates to lower inflation that currently stands at 10.4%.
Earlier this week, the International Monetary Fund (IMF) forecast that U.K. GDP will shrink by 0.3% this year, making it the worst performer among the Group of Twenty (G20) leading industrialized nations.
