INFLATION HITS UK ECONOMY AND IT SLOWS MORE THAN EXPECTED
As official figures show, Britain`s economy slowed more than in the in the first three months.
Only two weeks left before the early election starts, the Office for National Statistics affirms that the UK economy expanded at its slowest rate.
Gross domestic product`s rate increased only by 0.2 percent while the estimated rate was 0.3 percent. Economists predict that the growth rate will be same and will not change.
The overall economy growth fell to 2.0 percent, compared to the estimated 2.1 percent.
“UK GDP growth slowed … as consumer-facing industries such as retail and accommodation fell and household spending slowed. This was partly due to rising prices,” the ONS said.
After adjustments for inflation done, household spending rose by just 0.3 percent,which is a very small growth since the final three months of 2014.
Being one of the largest advanced world`s economy, Britain’s economy grew 1.8 percent last year, which was the fastest growth rate last year. This year consumer spending appeared to be under a pressure from the rising inflation.
As the inflation tends to 3 percent rate, household consumption will slow. The growth estimates of the Bank of England barely changed since 2016. Some forecasts predict the overall growth of 1.7 percent. Though, few foresee the increase of the interest rate by the BoE.