Commenting on the latest ONS GDP figures for January 2022, published today, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“While there was a strong rebound in output in January as the impact of Omicron started to ease, the figures have been pushed into the rear-view mirror by renewed domestic and global shocks, including Russia’s invasion of Ukraine.
“Consumer facing services firms enjoyed a particularly strong start to the year, following the partial release of pent-up customer demand as concerns over Omicron started to fade.
“UK’s economy could stall in the near term as rising inflation, soaring energy bills and higher taxes increasingly drag on activity, despite a probable boost to output in February from the end of Plan B Covid restrictions.
“Russia’s invasion of Ukraine has increased the risk of a recession in the UK by exacerbating the already acute inflationary squeeze on consumers and businesses and derailing the supply of critical commodities to many sectors of the economy.
“Raising interest rates and taxes at this time would weaken the UK’s growth prospects further, by undermining confidence and diminishing households’ and firms’ finances.
“We urge the Chancellor to use the upcoming Spring Statement to tackle the cost-of-doing-business crisis by delaying the National Insurance rise and committing to no further policy measures that will increase costs for business for the remainder of this Parliament.”
More information on the ONS GDP figures can be found here.