The UK economy could be heading for a recession - and the cost of living will rise even higher - after the Office for National Statistics revealed that GDP fell by 0.3% in April.
That’s the dire warning of a leading business group about the outlook for the country’s finances in the year ahead.
The impact of the winding down of the test and trace programme on the health sector and the hit to manufacturing by rising energy prices were the primary drags on growth, the ONS said. The CBI said it believes inflation is expected to remain high into the autumn, rising to 8.7% in October, leading to a ‘historic squeeze’ in household incomes, which will hit consumer spending.Tony Danker, CBI director general, said: ‘Let me be clear – we’re expecting the economy to be pretty much stagnant.
The business leader said politicians have been guilty of ‘weeks of politicking with the country standing on the brink of a summer of gridlock’ and called for the government to take further action.Rain Newton-Smith, CBI chief economist, called the numbers ‘a tough set of statistics to stomach’.He said war in Ukraine, a global pandemic and continued strains on supply chains are a ‘toxic recipe’ for growth when coupled with Brexit.
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