“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:
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