Geoffrey Smith 

Investing.com — The British economy grew less than expected in the first quarter, as the winter wave of Omicron-variant COVID-19, a skills shortage, and an intensifying cost-of-living crisis all weighed on output.

The fourth quarter saw a 0.8% increase in seasonally adjusted terms, according to the Office for National Statistics. However, preliminary data suggests that the number actually fell by 0.1% in March. Analysts were expecting 1.0% growth in the quarter. However, there was stagnation for March.

On Thursday, other data from March showed that the economy fell by 0.2% for the second consecutive month. The widened at 23.9 billion pounds, up from 20.6 billion for February.

It was the brightest spot with an increase in output of 1.7%. That is its highest gain in three years.

The slowdown may weaken the government’s hand as it prepares for another round of brinkmanship with the European Union over the terms of the Brexit deal negotiated by the two sides. The U.K. has drafted legislation that would suspend checks on all goods arriving in Northern Ireland, which remained part of the EU’s customs area under the deal. EU officials threatened to retaliate if London continues with its plans.

It traded at $1.2196 as of 2:20 ET (0620 GMT) after it stumbled on news. As the economy has continued to dimming, it has dropped more than 3% in the past month. For the fourth week in five months, the Bank of England expects that the economy will contract towards the end of this year.