TheUKeconomycontractedby0.1%inMarch,assurginginflationtookatollondemandtooffsettheboostthathadbeenexpectedfromtheendofCOVIDrestrictions. ThemonthlyfigurecomparestonogrowthinFebruaryand0.7%growthinJanuary,whilethequarterlyfigure(betweenJanuaryandMarch)showedagrowthof0.8%,whichwasdownfrom1.3%inthepreviousthreemonths. ChancellorRishiSunaksaid:'TheUKeconomyrecoveredquicklyfromtheworstofthepandemicandourgrowthinthefirstfewmonthsoftheyearwasstrong-fasterthantheUS,GermanyandItaly,butIknowthesearestillanxioustimes. 'OurrecoveryisbeingdisruptedbyPutin'sbarbaricinvasionofUkraineandotherglobalchallengesbutwearecontinuingtohelppeoplewherewecan. 'Growthisthebestwaytohepfamiliesinthelonger-termsoaswellaseasingimmediatepressureonhouseholdsandbusinesses,weareinvestingincapital,people,andideastoboostlivingstandardsinthefuture.' TheOfficeforNationalStatisticsdatawasreleasedasalarmbellsringoverthecountry'seconomicprospects,withtheBankofEnglandwarninglastweekthatarecessionnowloomedlargeduetothecostoflivingcrisisgatheringpace. FamiliesandbusinessesarestrainingunderaweightofglobalpriceincreaseslargelycausedbydemandoutstrippingsupplyastheCOVIDcrisiseasesand,latterly,theeffectsofRussia'swarinUkraine. Nolet-upininflation SeparatefiguresreleasedbytheONSnextweekaretippedbyeconomiststoshowinflationnearinga40-yearhighinApril,ataround8.5%. Theleap,fromtheMarchlevelof7%,willbemostlyaconsequenceofhigherenergycostsbeingpassedondownthesupplychain,raisingthecostofdoingbusinessandultimatelythecostofeverydaygoodsandservices. Thereisalsoonedirectpriceshocktobereflectedforthefirsttime:theunprecedented£693hikeintheenergypricecapforhouseholdsthattookholdon1April. AliceHaine,personalfinanceanalystatDIYinvestmentplatformBestinvest,said:'Thereisahighriskofanongoingcontractioninthecomingmonthsasthesqueezeonrealincomesrampsupamidthecost-of-livingcrisis,withinflationheadingfordoublefigures,allofwhichraisesthespectreofstagflation(acombinationofnegativeorstagnanteconomicgrowthandhighinflation).' DanielCasali,chiefinvestmentstrategistatTilneySmith&Williamson,said:'ImportantlyfortheUKeconomy,bothlabourdemandandbusinessinvestmentintentionsremainfirm. 'Thisshouldatleastreducetheriskofasharpdownturninoverallgrowth.TheBankofEnglandexpectsGDPtobeflatinthesecondquarter,thoughthereisthepotentialforamodestcontraction.' 'Thereisnobodyaround' Formanysmallbusinessowners,however,thesituationisalreadydesperate. BarryWhitehouse,owneratBanbury-basedartshop,TheArterysaid:'Wehavejusthadoneofourworstweekssincethepreviousrecession.Totaltakingsfortheweekdidn'tevencoverthewagesofthestaff. 'Lossoffootfallandemptystreetsmakescreatingasaleorgreetingacustomerimpossible.Thereisnobodyaround. 'Onlinesaleshavefallensharplyaseveryonehasoneeyeontheirenergybillstoseewhatmoneyisleft,andthereissuddenlyadropinenquiriesforshopitemsandourclasses. 'Iamreallyworried. 'MysavingshavegoneandIhavenothinglefttokeepthebusinessafloatwithoutsalesandfootfall.Iwillnotsurvivemanymoreweekslikethis.' SandraWilson,directorofIpswich-basedrecruitmentandHRfirmCottrellMoore,said:'TheUKeconomyisstartingtofeellikeatheatr
