Industrial action in the public sector negatively affected February’s activity, while construction output rebounded following January’s weather-related slowdown. Consumer-facing services saw 0.4% month-on-month growth, but other service sectors were weaker.

Revised historical data indicates greater economic momentum entering 2023, suggesting a slight Q1 GDP increase. However, the EY ITEM Club predicts a Q2 GDP decline due to the May bank holiday’s temporary effects on output and ongoing industrial action in the health sector.

Despite this, high-frequency data resilience, reduced household energy bills from July, and the fiscal impact of the recent Budget may boost economic recovery in the latter half of 2023.

Kevin Brown, savings specialist at Scottish Friendly, commented: “After a promising start to the year with growth of 0.4% in January, there was hope that UK GDP would continue to rise this quarter but it has once again fallen flat.

“The UK economy is being shackled by a range of fiscal policies that have been introduced to tackle inflation and restore market confidence following last year’s disastrous mini budget. Higher interest rates and rising taxes are impacting consumer confidence and spending, while a depleted labour market is adding to the UK’s economic woes.

“For the best part of 18 months there has been little sign of sustained growth in the UK economy and the prospect of a recession still looms large. The Chancellor has set ambitious plans to halve inflation by the end of the year and this is likely to be the key to unlocking the UK’s growth potential heading into next year.

“The UK’s monetary policies hinge on this and until it is brought under control the chances of the UK economy firing again remain slim.”