During the first quarter of 2022, the United Kingdom's GDP decelerated its recovery with respect to the previous quarter, registering a year-over-year growth rate of 9.86%. Inflation increased at a year-on-year growth rate of 6.23%. The labour market continued to recover from the economic effects of the Covid-19 pandemic, resulting in a decrease in the unemployment rate and an acceleration in employment. In addition, the pound sterling slightly depreciated against the dollar, recording an average exchange rate of 1.34 $/£ during the first quarter.
Macroeconomic outlook report: UK 1Q22
- During the first quarter of 2022, UK GDP growth increased by 2.64 p.p. compared to the previous quarter, to register a year-on-year rate of change of 9.86%. This increase in the year-on-year rate was promoted by the easing of Covid-19 restrictions, especially in the together with the growth of household consumption which registered an increase of 5.35 p.p. compared to the previous quarter.
- Regarding the labor market, the unemployment rate decreased by 0.40 p.p. compared to 4Q21, to stand at a rate of 3.70%. Meanwhile, employment in the UK recorded a year-on-year growth rate of 1.21%, after an acceleration of 0.16 p.p. compared to the previous quarter.
- During the first quarter, the British pound sterling slightly depreciated by $0.01 per pound compared to the previous quarter, to an exchange rate of 1.34 $/£.
- Finally, inflation increased from the previous quarter to a rate of 6.23%. Thus, CPI managed to surpass even more the Bank of England's 2% target, largely reflecting the global supply-chain problems and elevated energy prices.
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