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UK recession fears grow as rising inflation set to leave more Scots struggling

By Chris McCall

The UK economy shrank in March as people began to reign in their spending amid the growing cost of living crisis.

Official figures showed the economy contracted by 0.1 per cent in March after no growth in February - sparking fears the country could be heading into recession.

Tory-imposed tax rises and rising fuel bills have been blamed for consumers spending less.

The Bank of England hiked in interest rates to a 13-year high of one per cent last week to try to curb inflation and warned the economy was set to stall in the second quarter.

Alison Thewliss, SNP spokeswoman on the economy, today warned the UK Government "has absolutely no plans to deal with this."

"Growth is flatlining, and the Bank of England predicts growth is going to flatline for many years.

"That's really quite worrying as the UK Government plan is to grow our way out of this.

"They seem to have no plan to grow the economy - and that should worry all of us, particularly when costs are rising in the shops, when fuel is rising, when energy bills are soaring, and when inflation is set to rise as well.

"The National Institute of Social and Economic Research predicted yesterday that RPI inflation could hit 14-and-a-half per cent next year.

"That's really quite stark - and the UK Government has absolutely plans to deal with this."

Chancellor Rishi Sunak said UK first quarter growth was faster than the US, Germany and Italy.

But added: "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,” he said.

The figures showed the wind down of the coronavirus test and trace programme weighed on first quarter growth.

In March, the decline was led by a 0.2 per cent fall in output from the all-important services sector, with consumer-facing services down 1.8 per cent in a sign of the pressure already being felt among households.

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Dive Deeper:
UK economy shrank by 0.1% in March as cost of living crisis bites – as it happened
Calls for emergency budget grow as UK economy contracts unexpectedly in March, with consumers cutting back on spending, and car…
UK economy shrank 0.1% in March as inflation and Ukraine war takes toll
Risk of recession increases as economy goes into reverse, piling pressure on chancellor to offer help to struggling families
'Incompetent' PM and Chancellor blamed as UK heads for recession
BORIS Johnson’s “catalogue of failure” is inflicting poverty on millions of people, the Scottish Greens have warned as the UK was forecast…
GDP: UK economy shrank 0.1% in March
The figures will increase fears that Britain is heading for another recession as a result of the cost-of-living crisis
One subscription that gives you access to news from hundreds of sites
UK economy shrank in March as households rocked by soaring food and living costs
Prices are rising at their fastest rate for 30 years, driven by soaring fuel, food and energy costs - and…
How central banks in India, US and other economies are fighting inflation
NEW DELHI: Global inflationary pressures are being faced by all economies alike. The surge in prices of key commodities has…
Get all your news in one place