UK economic growth slows to just 0.1% as cost of living crisis bites

THE UK economy has inched up 0.1% as a cost of living crisis continues to pummel families’ finances.

Official figures show that the gross domestic product (GDP) grew by 0.1% in February 2022.

The UK's economic growth slowed to just 0.1% as households' budgets are being hit by a cost of living crisis — The UK’s economic growth slowed to just 0.1% as households’ budgets are being hit by a cost of living crisis

That marks a slowdown since the month before, when the economy grew 0.8% – rebounding after the rapid spread of Omicron at the end of last year.

The Office for National Statistics (ONS) measures GDP monthly and it shows if the economy is growing or not.

It’s important because a higher rate of growth means there will more likely be an increase in jobs of offer, pay rises, and more money to invest in keeping the country up and running.

It slowed much more sharply than experts expected – economists predicted it would go up 0.3%.

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Figures showed that the services sector was the main driver behind the slight increase, growing 0.2%.

That’s because the tourism industry bounced back as the country got back on track after being hit by a spike in Covid cases, growing 33.1%.

But output from the construction and production sectors decreased by 0.1% and 0.6% respectively, dragging down the rate of growth.

It means that the UK’s economy is now 1.5% above its pre-Covid level, in February 2020.

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Experts have predicted that economic growth will slow this year as inflation rockets and the cost of energy, fuel, food and transport goes up.

Rising prices have been fuelled further by the Russia-Ukraine prices, which is helping to raise energy and fuel prices.

It means that the government’s Office for Budget Responsibility cut its forecast for growth in 2022 to 3.8% from 6.0% in its previous forecast in October.

It also predicts that inflation will hit a 40-year high of 8.7% later this year.

Meanwhile, interest rates went up too to 0.75% – increasing the cost of borrowing for families.

It means that families are struggling to make ends meet under the cost of living crisis.

It means that households are facing a £1,000 drop in income as budgets are squeezed to the max.

How to protect your finances

There are a number of things you can do to try and beat rising prices and bills.

You might be entitled to benefits without realising – charity Turn2us has estimated that at least 7 million people are missing out on a massive £15billion.

You can check by using an online benefits calculator, which are offered by charities such as Turn2Us and EntitledTo.

As energy bills soar, you’ll want to make sure you’re getting all the help you can get.

Many suppliers run their own schemes offering help, or have charitable trusts to help pay arrears.

British Gas Energy Trust, for example, runs a scheme where anyone can apply for a grant, and you don’t even have to be a customer.

Other firms that offer grants just to their customers include:

Meanwhile, you could get free cash from your local council under various schemes.

Struggling families can apply for cash and grants for furniture, bills and food up to £1,000 under the welfare assistance scheme.

Grants are available through your local council – which will decide whether you’re eligible and what help is available. Some councils don’t have a scheme though.