UK slashes 2022 growth forecast on Ukraine and raging inflation

UK slashes 2022 growth forecast on Ukraine and raging inflation

LONDON: Britain’s economy will grow far slower than expected this year owing to the Ukraine war and soaring global inflation, Finance Minister Rishi Sunak said Wednesday in a government budget update. The UK economy was set to grow 3.8 percent this year, down from an official estimate of six percent made in October, Chancellor of the Exchequer Sunak told parliament. He said that the Office for Budget Responsibility-the government’s official economic forecaster-“has not accounted for the full impacts of the war in Ukraine and we should be prepared for the economy and public finances to worsen, potentially significantly”.

“Their initial view combined with high global inflation and continuing supply chain pressures means” the UK economy is forecast to grow 3.8 percent this year. Gross domestic product was estimated to expand a further 1.8 percent next year, down from an official prediction of 2.1 percent. Britain’s annual inflation accelerated to 6.2 percent in February from 5.5 percent in January, the Office for National Statistics (ONS) said in a statement.  “The further rise in inflation… adds to the pressure on the Chancellor to offset more of the cost of living crisis,” noted Capital Economics analyst Paul Dales. The last time the British inflation rate was higher