BRITAIN risks sliding into recession as the economy recorded ZERO growth even before the war in Iran kicked off, experts warn.
The UK could now go into reverse as high energy prices push up inflation hitting growth prospects and dealing a blow to Rachel Reeves.
The Chancellor insists there is “more to do” but the Middle East conflict is set to hit the UK further as the economy struggles for momentum.
Figures reveal the flatlining in January which was a fall from just 0.1 per cent in December. The three months to January showed growth of 0.2 per cent.
The manufacturing sector contracted by 0.1 per cent, construction only grew by 0.2 per cent and the services sector was flat in January.
A technical recession is recorded as two consecutive quarters of falling GDP.
But Tomasz Wieladek, from US asset manager T. Rowe Price, warned: “The UK has been one of the weakest advanced economies in terms of recent growth performance.
“Therefore, the current oil price shock will most likely not just lead to inflation, but also push the UK economy into recession, raising unemployment and reducing GDP.”
Martin Beck, chief economist at WPI Strategy, told The Sun: “The UK is not in recession yet, but it is far too close for comfort.
“Even though the energy price cap is set to fall by 7% in April, saving the typical household about £117 a year, that relief could prove short-lived if conflict in the Middle East keeps global energy prices high. With growth flat in January, the UK has very little room for error.”
Meanwhile, Ms Reeves said: “Our economic plan is the right one, but I know there is more to do.
“In an uncertain world, we are building a stronger and more secure economy by cutting the cost of living, cutting national debt and creating the conditions for growth to make all parts of the country better off.”
The Chancellor will use a speech next week to push for closer ties with Brussels in a push for greater growth.
Experts also say the Bank of England will hold off from cutting interest rates when policymakers meet on Thursday.
