{"id":535895,"date":"2026-03-14T12:53:11","date_gmt":"2026-03-14T12:53:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/535895\/"},"modified":"2026-03-14T12:53:11","modified_gmt":"2026-03-14T12:53:11","slug":"growth-stalls-as-inflation-fears-mount","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/535895\/","title":{"rendered":"Growth stalls as inflation fears mount"},"content":{"rendered":"

The UK economy stalled unexpectedly at the beginning of the year, reinforcing fears that the US-Israeli war with Iran will fuel inflation, hit economic output and even cause a recession.<\/p>\n

GDP, the key measure of output, showed no growth in January, down from growth of 0.1 per cent in the previous month, data from the Office for National Statistics (ONS) showed \u00adon Friday. Analysts had expected \u00adoutput to increase by 0.2 per cent.<\/p>\n

In the three months to January the economy expanded by 0.2 per cent, up marginally from growth of 0.1 per cent in the previous quarter. Economists had forecast growth of 0.3 per cent. \u00adLiz McKeown, director of economic statistics at the ONS, said: \u201cThe overall picture remains subdued.\u201d\u00a0<\/p>\n

The flat economic activity will add to fears that growth is on a downward \u00adtrajectory this year. Martin Beck, chief economist at WPI Strategy, said the figures showed that the \u201cUK economy was already losing steam before the \u00adlatest war-related shock\u201d.<\/p>\n

In what it called \u201ca worst-case scenario where oil rises to $140 per barrel\u201d, Oxford Economics forecast that UK inflation could go above 5 per cent in the last quarter of 2026.<\/p>\n

Tomasz Wieladek, a strategist at T Rowe Price, said: \u201cA UK recession is not a tail risk. It is the central case. This puts the Bank of England in an acutely uncomfortable position. The monetary policy committee must now confront the hardest trade-off in monetary policy: inflation is too high, but the economy is about to contract.\u201d<\/p>\n

On Thursday the Bank of England is expected to keep interest rates at 3.75\u200aper cent because of concerns about how the rise in oil prices could increase the cost of living. Before the conflict started, investors thought there would be at least two rate cuts this year and put a 90 per cent chance of the first \u00adreduction taking place next week.<\/p>\n

The chancellor said she knew the government had \u201cmore to do\u201d in order to re-energise the economy. <\/p>\n

Rachel Reeves added: \u201cIn 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.\u201d\u00a0<\/p>\n

\"RachelRachel Reeves and Ed Miliband, the energy secretary, during a round table with petrol retailers and energy suppliers at No 11 on FridayDan Kitwood\/PA<\/p>\n

It came as crude prices rose and fell sharply throughout the week as investors tried to predict how long the Strait of Hormuz, the shipping artery through which a fifth of global oil supplies \u00adpasses, would be effectively closed because of the war in the Middle East.<\/p>\n

\"TankersTankers sail near the Strait of Hormuz on WednesdayReuters<\/p>\n

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The price of a barrel of Brent crude, the international benchmark, leapt to nearly $120 at the start of the week before stabilising at about $103 yesterday. Traders were reassured after European countries started talks with Iran to guarantee safe passage for their ships through the strait, according to the Financial Times. An Indian tanker also passed through the strait unharmed after ships were attacked during the week. Yet analysts said the dip should be viewed as short-lived.\u00a0<\/p>\n

UK government borrowing costs whipsawed over the week. The yield on ten-year gilts fell to 4.53 per cent before reaching nearly 4.8 per cent yesterday. Yields and prices move in \u00adopposite \u00addirections.<\/p>\n","protected":false},"excerpt":{"rendered":"The UK economy stalled unexpectedly at the beginning of the year, reinforcing fears that the US-Israeli war with…\n","protected":false},"author":2,"featured_media":535896,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-535895","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/535895","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=535895"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/535895\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/535896"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=535895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=535895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=535895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}