"Services fell by 0.2 percent in March and was the main contributor to the month's fall in GDP, reflecting a large decrease in the wholesale and retail trade and repair of motor vehicles and motorcycles industry," the country's Office for National Statistics said in a statement.
LONDON, May 12 (Xinhua) -- Britain's gross domestic product (GDP) fell by 0.1 percent in March after registering no growth in February, the country's Office for National Statistics (ONS) said on Thursday.
"Services fell by 0.2 percent in March and was the main contributor to the month's fall in GDP, reflecting a large decrease in the wholesale and retail trade and repair of motor vehicles and motorcycles industry," it said in a statement.
Production also fell in March by 0.2 percent, while construction grew by 1.7 percent.
Darren Morgan, the ONS's director of economic statistics, told the BBC's Today program that the monthly GDP decline showed that the cost-of-living crisis was "really beginning to bite."
"We saw retailing have a large fall and that was well below expectations. In particular, we saw far lower levels of spending on those big-ticket, non-essential items," he said. "We also saw a large fall in fuel sales, with one fact that people telling us they're beginning to cut back on essential and non-essential journeys because of the price they're paying at the pumps."
Meanwhile, the country's GDP grew by 0.8 percent in the first quarter of this year compared with the previous three months, and is now 0.7 percent above its pre-pandemic (last quarter of 2019) level.
"Growing the economy is one of the best ways to help with the cost of living and that's why I'm pleased today's figures show the UK economy is continuing to grow," tweeted Chancellor of the Exchequer Rishi Sunak.
"The economy is now bigger than it was before COVID hit, and growing faster than the U.S., Germany, France and Italy," he wrote.
But economists remain cautious. March's GDP figures show that economic growth has slowed down and people had begun to cut spending even before the large energy cap rise in April.
"The economy barely kept its head above the water during a volatile start to the year, but times look set to get that bit tougher," commented Rain Newton-Smith, chief economist at the Confederation of British Industry (CBI). "Cost pressures and rising prices have tightened their grip, with both businesses and households feeling the pinch.".
The country's 30-year-high 7 percent March inflation rate is likely to keep rising this year. The Bank of England (BoE) projected inflation to rise further to 9 percent in the second quarter due to the energy price cap rise in April, and then peak at "slightly over 10 percent" in the last quarter as the energy price cap is likely to be increased again in October.