The UK economy slowed more sharply than expected in February, raising fears that growth could stall or be thrown into reverse in the coming months.
Figures from the Office for National Statistics show monthly gross domestic product (GDP) expanded by just 0.1 per cent, compared to 0.8% in January. Analysts had forecast growth of 0.3%.
Manufacturing slumped as car producers struggled to source parts amid global supply chain disruptions. However, there was a sharp recovery in overseas holiday bookings with the easing of Covid restrictions.
Danni Hewson, financial analyst with AJ Bell, said a downbeat production sector means a greater reliance on services for growth. With the cost of living crisis set to intensify, February's anaemic performance could be "as good as it gets for a while".
"It was the month the UK was supposed to start 'living with covid' but if February is an indication of what that life will look like, the UK economy is in trouble," she said.
"There was growth, but barely, the scaling back of Covid testing programmes and with the booster boost long gone the economy was left limping, further hampered by a car industry still plagued by chip shortages and spiralling costs. And that was before Russia invaded Ukraine, pushing up prices of crucial metals even further, snarling up supply chains once again and sending energy costs into the stratosphere."
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