UK GDP Expands Marginally In February
The UK economy expanded only marginally in February as the growth in services was almost offset by contractions in production and construction.
Gross domestic product grew 0.1 percent month-on-month, much slower than the 0.8 percent increase in January, the Office for National Statistics said Monday. This was also weaker than the expected growth of 0.3 percent.
Monthly GDP was now 1.5 percent above its pre-coronavirus pandemic level. GDP expanded 1.0 percent in three months to February.
On the production-side, services grew 0.2 percent, mainly driven by tourism-related industries with increases in travel agency, tour operator and other reservation services.
Meanwhile, industrial production shrank 0.6 percent, following a 0.7 percent rise in January. Manufacturing was the main driver of negative growth, falling 0.4 percent in February.
Construction output decreased 0.1 percent in February after posting a revised increase of 1.6 percent in January.
The news that the economy was hardly growing at all in February suggests the economy had a little less momentum in the first quarter than had previously thought, and increases the risk of a contraction in GDP in the coming months as the squeeze on household real incomes intensifies, Ruth Gregory, an economist at Capital Economics, said.
In a separate communiqué, the ONS said the visible trade deficit declined in February as exports recovered amid a fall in imports.
The visible trade gap narrowed to GBP20.6 billion from GBP 23.9 billion in the previous month. The expected level was GBP 20.0 billion.
Exports rebounded 7.8 percent on month, while imports dropped 2.5 percent in February.
The trade in services showed a surplus of GBP 11.33 billion versus a GBP 11.06 billion surplus in the prior month.
The overall trade deficit declined to GBP 9.3 billion from GBP 12.8 billion a month ago.
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