The UK economy contracted in March as households cut down on spending amid rising prices. 

The economy shrank by 0.1% in March after seeing no growth in February, figures released by the Office for National Statistics (ONS) show.

Britain’s economy grew at the slowest pace for a year at the start of 2022 amid mounting fears that the cost-of-living crisis may plunge the UK into recession.

The Office for National Statistics (ONS) said gross domestic product (GDP) rose by 0.8% between January and March, down from growth of 1.3% in the previous three months and the weakest since the first quarter of last year.

Speaking on the latest figures, Chancellor Rishi Sunak blamed the invasion of Ukraine and "other global challenges" for disrupting the recovery of the economy from the pandemic.

He said: “The UK economy recovered quickly from the worst of the pandemic and our growth in the first few months of the year was strong, faster than the US, Germany and Italy, but I know these are still anxious times.

“Our recovery is being disrupted by Putin’s barbaric invasion of Ukraine and other global challenges, but we are continuing to help people where we can.

“Growth is the best way to help families in the longer-term, so as well as easing immediate pressures on households and businesses, we are investing in capital, people and ideas to boost living standards in the future.”

While the expansion means GDP is now 0.7% above levels seen before the pandemic struck, the figures are likely to mark the calm before the storm as warnings are growing over a recession in the UK as the cost-of-living crisis deepens.

Darren Morgan, director of economic statistics at the Office for National Statistics (ONS), said: “The UK economy grew for the fourth consecutive quarter and is now clearly above pre-pandemic levels, although growth in the latest three months was the lowest for a year.

“This was driven by growth in a number of service sectors as the economy continued to recover from Covid-19 effects, including hospitality, transport, employment agencies and travel agencies. There was also strong growth in IT.”

He added: “Our latest monthly estimates show GDP (gross domestic product) fell a little in March, with drops in both services and in production.

“Construction, though, saw a strong month, thanks partly to repair work after the February storms.”