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Economic output was flat in month-on-month terms in February,
against the consensus forecast for a 0.1% increase in a Reuters
poll of economists.
But the Office for National Statistics (ONS) revised up its
estimate for January's growth to 0.4% from 0.3% - meaning
Britain is likely to avoid the first-quarter contraction that
the Bank of England predicted last month.
The bigger picture remains weak. While sidestepping recession
for the time being, Britain's economy has stagnated over the
last year.
International Monetary Fund projections published this week
showed Britain bottom of the world's major economies in terms of
expected economic growth in 2023, with a 0.3% contraction
pencilled in, equivalent to a 0.7% fall on a per capita basis.
Suren Thiru, economics director at accountancy body ICAEW, said
recession fears would linger as higher taxes and borrowing costs
offset the fall in inflation and government support for energy
bills.
"These figures suggest that the economy has lost momentum as
sky-high inflation and strike action continue to drag on key
drivers of UK GDP, notably services and industrial production,"
Thiru said.
He said the BoE should end its run of interest rate hikes next
month as raising rates would further weaken the country's growth
prospects.
The ONS said the vast services sector contracted by 0.1% in
February, hurt by strikes by teachers and other public sector
workers, but was offset by a surge in the much smaller
construction sector which rebounded from bad weather in January,
the ONS said.
The upward revision to January means the economy would need to
have shrunk by 0.6% in March for the first quarter as a whole to
show a contraction.
Finance minister Jeremy Hunt said the data showed Britain's
economic performance had been stronger than thought.
Thursday's figures showed a 2.4% surge in construction output -
which represents around 6% of the economy - was the sole driver
of economic growth in February.
ONS officials attributed the jump in construction output to a
recovery in February from disruption caused by bad weather in
January, especially in new work, and a surge in maintenance and
repair work.
(Reporting by Andy Bruce; Editing by William Schomberg and
Christina Fincher)
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