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ICAEW: UK economy on fragile ground following March GDP fall

Author: ICAEW

Published: 12 May 2023

Suren Thiru, Economics Director at ICAEW, responds to the latest UK GDP figures, released by the Office for National Statistics today (Friday 12 May 2023):

“While the economy grew slightly in the first quarter, the sharp slowdown from a strong January to a decline in output in March points to continued stagnation as high inflation and strikes stifled activity.

“The positive first quarter could be followed by a slight fall in GDP in the second quarter as the extra Bank Holiday for the Coronation and continued strike action limit activity.

“The likely squeeze on consumer spending and investment from higher taxes, and the lagged impact of rising interest rates, may mean that our growth prospects are weaker than the Bank of England currently expects.

“Against this backdrop, the Monetary Policy Committee’s decision to raise interest rates may soon look like a misstep.”


Notes to editors:

Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841