Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
UK economic growth slowed by more than expected in February, with Britain’s industrial output dropping as manufacturers struggled to obtain parts.
UK GDP rose by just 0.1% in February, new figures from the Office for National Statistics shows, with activity at Covid-19 Test and Trace and vaccination rollout programmes dipping.
That followed 0.8% growth in January, and is below the 0.3% February growth which economists expected. It leaves the economy around 1.5% larger than two years earlier, just before the UK’s first lockdowns.
The ONS reports that the services sector was the main contributor to growth in February, expanding by 0.2%, after England’s ‘Plan B’ restrictions were lifted at the end of January.
Ths was driven by tourism-related industries, after the scrapping of coronavirus testing for double-vaccinated travellers arriving in the UK from mid-February, in time for the half-term holidays.
The ‘travel agency, tour operator and other reservation services’ sector saw a 33% rise in activity, and accommodation grew 23%.
But human health activities dropped (down 5.1%), due to a fall in activity at NHS Test and Trace and vaccination activity after a busy December and January.
The production sector suffered a 0.6% drop in activity, while construction dipped by 0.1%.
Manufacturing was the main driver of negative growth in the production sector , falling by 0.4% in February 2022, the ONS says.
Car production, which has suffered from the shortage of semiconductors, saw output fall over 5%.
Contractions of 5.4% in manufacture of transport equipment (driven entirely by the fall in manufacture of cars), 4.3% in manufacture of computer, electronic and optical products, and 5.0% in manufacture of chemicals and chemical products were slightly offset by manufacture of basic pharmaceutical products and pharmaceutical preparations, which saw growth of 9.8%.
It leaves monthly GDP 1.5% above its pre-Covid-19 levels of February 2020.
Services is now 2.1% above its pre-coronavirus level, while construction is 1.1% above and production is 1.9% below, the ONS reports.
Also this morning, Elon Musk has decided not to join Twitter’s board of directors, in a U-turn just days after becoming its biggest shareholder.
Twitter’s chief executive, Parag Agrawal, says he believes the moves is for the best.
We have and will always value input from our shareholders whether they are on our board or not. Elon is our biggest shareholder and we will remain open to his input.”
There will be distractions ahead, but our goals and priorities remain unchanged.
Musk has tweeted a hand-over-mouth emoji following Agrawal’s announcement.
He’s been outlining various ways in which Twitter could (in his view) improve the services, including adding an edit button to tweets and criticising its moderation policies.
Europen stock markets are on track to open lower:
- 7am BST: UK GDP and trade report for February
- 1pm BST: NIESR Monthly GDP Tracker for March
- 2pm BST: Russian foreign trade data for February
- 2pm BST: Bank of Israel’s interest rate decision