London Daily

Focus on the big picture.
Saturday, May 31, 2025

UK economy being hit on multiple fronts - and there's little cause for celebration despite growth

UK economy being hit on multiple fronts - and there's little cause for celebration despite growth

The services sector, which includes everything consumer facing from shops and restaurants to hairdressers and travel agencies contracted by 0.8% in March.
Britain may avoid falling into recession this year but the recent set of economic data hardly gives us much cause for celebration.

Over the past four quarters the country has grown by; 0.1%, 0.1%, -0.1%, 0.1%, and ours is the only G7 economy that still hasn't recovered to its pre-pandemic size.

In March alone, the economy shrank by 0.3%, which was worse than expected by economists.

The country is being hit on multiple fronts, many of them related.

Widespread industrial action is weighing on public sector output.

Meanwhile high inflation and high taxes are hitting disposable incomes, which means people are more cautious about spending.

Consumer spending was flat in the first quarter of the year, but households are still running down their lockdown savings in an effort to maintain their living standards. They will soon start to run dry.

The consumer facing services sector, which includes everything from shops and restaurants to hairdressers and travel agencies contracted by 0.8% in March.

Economists said that wet weather may have played a part. The manufacturing and construction sectors fared better but, considering the services sector is the bedrock of the UK economy, the latest data will make for unpleasant reading.

Jeremy Hunt, the chancellor, attempted to put a positive spin on the quarterly figures this morning, saying: "It's good news that the economy is growing."

It's true that the economy has been more resilient than many feared. Towards the end of last year, economists were forecasting that the country would be in recession by now, but it looks like we may avoid one altogether.

The Bank of England said yesterday that the country would actually eke out some growth this year, marking a dramatic upgrade to its forecasts.

Considering what the outlook looked like seven months ago - at the time of the "mini-budget" - that may be considered an achievement, albeit a consolatory one.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×