The UK economy contracted slightly in March as households slashed their spending due to rising inflation. According to the British Office for National Statistics, there was a contraction of 0.1 per cent compared to the previous month. In February, the economy stagnated.
According to the Census Bureau, the deflation is mainly related to lower retail spending, especially on more expensive goods. Because of rising energy and food prices, families are becoming more limited. For example, the car was driven less due to higher fuel prices. Fewer new cars were also sold.
During the entire first quarter of this year, the British economy grew by 0.8 per cent, but that was weaker than the 1.3 per cent increase in the fourth quarter. The Bank of England (BoE) has already warned of a sharp slowdown in the economy as a result of rising inflation. The central bank believes inflation could reach more than 10 percent in the fall. The Bank of England is already raising interest rates to curb high inflation.