UK growth forecasts slashed due to Ukraine war

UK economic growth for this year is expected to slow dramatically due to the war in Ukraine.

The government's forecaster expects the UK to grow 3.8% this year, well below its previous forecast of 6.5%.

It is "too early to know the full impact of the Ukraine war" on the UK, the Office for Budget Responsibility (OBR) said.

Mr Sunak told MPs that the prospect of lower growth outlook had not damaged the country's "strong jobs performance"

In his Spring Statement the Chancellor Rishi Sunak said the OBR's "initial view, combined with high global inflation and continuing supply chain pressures", means it is now forecasting growth of 3,8% in 2022, followed by 1.8% in 2023, 2.1%, 1.8% and 1.75% in the following three years.

The OBR publishes its Economic and Fiscal Outlook twice a year. In October, prior to Russia's invasion of Ukraine, it forecast growth of 2.1% in 2023, 1.3% in 2024 and 1.6% in 2025.

GDP or Gross Domestic Product is one of the most important ways of showing how well, or badly, an economy is doing.

It's a measure - or an attempt to measure - all the activity of companies, governments and individuals in an economy.

GDP allows businesses to judge when to expand and hire more people, and for government to work out how much to tax and spend.

In its report, the OBR said Russia's invasion of Ukraine had "major repercussions for the global economy, whose recovery from the worst of the pandemic was already being buffeted by Omicron, supply bottlenecks, and rising inflation".