UK economic growth is expected to slow dramatically this year due to the war in Ukraine.
The government forecaster expects the UK to grow by 3.8% this year, well below its previous forecast of 6.5%.
It is “too early to know the full impact of the Ukraine war” on the UK, the Office for Budget Responsibility (OBR) said.
Mr Sunak told MPs that the prospect of lower growth prospects has not hurt the country’s “strong employment performance”.
In its spring statement, Chancellor Rishi Sunak said the OBR’s “first assessment coupled with high global inflation and ongoing supply chain pressures” means it now forecasts 3.8% growth in 2022, followed by 1 .8% in 2023 and 2.1%. , 1.8% and 1.75% in the following three years.
The OBR publishes its Economic and Financial Outlook twice a year. In October, ahead of Russia’s invasion of Ukraine, it forecast growth of 2.1% in 2023, 1.3% in 2024 and 1.6% in 2025.
GDP, or gross domestic product, is one of the most important ways to show how well or badly an economy is doing.
It is a measure – or an attempt to measure – the overall activity of corporations, governments and individuals in an economy.
GDP allows companies to assess when to expand and hire more employees, and the government how much to tax and spend.
In its report, the OBR said Russia’s invasion of Ukraine was having “a major impact on the global economy, whose recovery from the worst of the pandemic has already been rattled by Omicron, supply shortages and rising inflation.”
Add Comment