UK economy flatlines in February as teachers’ and Civil Service strikes drag on growth

Jeremy Hunt insisted the economic outlook is looking “brighter than expected”

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The UK’s economy showed no growth in February as the nation narrowly avoided falling into a recession, official figures show.

Strike action by teachers and Civil Service workers acted as one of the biggest drags on  gross domestic product (GDP), after thousands of workers walked out during the month.

The decline in the services sector offset growth in the construction sector, which saw a rebound due to more mild weather and from new work and repairs.

GDP had been expected to grow by 0.1% in February, month-on-month, according to a consensus forecast supplied by Pantheon Macroeconomics. To two decimal places, the economy eked up by just 0.02% in February, but looking at the broader picture, GDP grew by 0.1% in the three months to February.

Teachers’ and Civil Service strike action acted as one of the biggest drags on economic growth (Photo: Getty Images)Teachers’ and Civil Service strike action acted as one of the biggest drags on economic growth (Photo: Getty Images)
Teachers’ and Civil Service strike action acted as one of the biggest drags on economic growth (Photo: Getty Images)

ONS director of economic statistics Darren Morgan said: “The economy saw no growth in February overall. Construction grew strongly after a poor January, with increased repair work taking place.

“There was also a boost from retailing, with many shops having a buoyant month. These were offset by the effects of Civil Service and teachers’ strike action, which impacted the public sector, and unseasonably mild weather led to falls in the use of electricity and gas.”

The latest figures come as the Office For National Statistics (ONS) said the UK’s consumer prices index (CPI) inflation rate surged to 10.4% in the same month, unexpectedly jumping higher despite efforts from the Bank of England to pull it back to its 2% target.

Despite recording no growth in February, Chancellor Jeremy Hunt insisted the UK’s economic outlook is “looking brighter than expected”. He said: “GDP grew in the three months to February and we are set to avoid recession thanks to the steps we have taken through a massive package of cost-of-living support for families and radical reforms to boost the jobs market and business investment.”

The economy grew by 0.4% in January, revised from the 0.3% the ONS previously predicted, meaning it saw a slowdown the following month. Nevertheless, the UK avoided falling into a recession at the end of last year, with GDP edging up by 0.1% over the final three months.

The ONS said a recession is generally defined in the UK as two quarters of declining GDP in a row. It means that GDP would need to sink below 0.6% in March for the economy to have shown negative growth in the latest quarter.

Labour criticised the lack of growth and said the UK is still “lagging behind on the global stage”, despite the country’s “enormous promise and potential”. Shadow chancellor Rachel Reeves said: “The reality of growth inching along is families worse off, high streets in decline and a weaker economy that leaves us vulnerable to shocks.

“These results are exactly why Labour’s mission to secure the highest sustained growth in the G7 is so important – it’s that level of ambition that we need to strengthen our economy, get our high streets thriving again and make families across every part of Britain better off.”