UK GDP slows to 0.1% in February

Gross domestic product (GDP) slowed in the UK as the economy only saw 0.1% growth in February, down from a growth rate of 0.8% in January. According to the Office for National Statistics (ONS), services grew by 0.2% and was the main contributor to February's growth in GDP, although this was partially offset by production which fell by 0.6%, and construction which fell by 0.1%. The services growth was mainly driven by tourism-related industries with increases in both travel agency, tour operator and other reservation service and related activities growing 33.1% on the month. Accommodation also grew 23%, and services is now 2.1% above its pre-coronavirus level. Overall, consumer-facing services (retail trade, food and beverage activities, travel and entertainment) are now 5.2% below pre-coronavirus levels, while all other services are 4% above. Meanwhile, output in consumer-facing services grew by 0.7% in February 2022, following a 2% growth in January. The February increase was mainly driven by 33.1% growth in travel agency, tour operator and other reservation service and related activities, following a growth of 1.4% in January 2022. This was partially offset by wholesale and retail trade and repair of motor vehicles and motorcycles, the largest negative contributor in consumer-facing services. However, accommodation and food service activities grew by 8.6% in February 2022 and was the main contributor to February’s growth in services. Within this sector, the main driver was accommodation, which grew by 23%. ONS said this partly reflected a bounce back following weakness in both January and December due to the impact of Omicron. In particular, there was “strength” seen in hotels and camping grounds, and February 2022 saw this sub-sector’s first positive growth since August 2021. Darren Morgan, ONS director of Economic Statistics, said: “The economy was little changed in February with the easing of restrictions for overseas travel - and increased confidence in booking holidays in the UK - triggering strong growth in travel agencies, tour operators and hotels. Manufacturing fell notably, with motor manufacturers continuing to struggle to source parts.”

UK GDP slows to 0.1% in February

Monthly GDP is now 1.5% above pre-pandemic levels in February 2020, whereas consumer-facing services are 5.2% below pre-coronavirus levels

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