The United Kingdom’s economy contracted slightly in March as households curbed their spending due to high inflation. According to the British National Statistics Office, there was a 0.1 percent contraction compared to a month earlier.
In February, the economy stagnated.
According to the statistical office, the contraction is mainly related to lower retail spending, especially on more expensive items.
Due to the increased energy and food prices, households are more limited. For example, the car was driven less because of the expensive fuel. As a result, fewer new cars were also sold.
Over the entire first quarter of this year, the British economy grew by 0.8 percent, but that was weaker than the plus of 1.3 percent in the fourth quarter. The Bank of England (BoE) has already warned of a sharp cooling of the economy as a result of high inflation.
The central bank thinks inflation could reach more than 10 percent in the autumn. The BoE is already raising interest rates to curb high inflation.