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Dow Jones Newswires: U.K. economy stalled in February after strikes

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The U.K. economy stalled in February after public-sector strikes hit activity in the services sector, adding to concerns the economy is struggling amid sky-high inflation and rising interest rates.

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The country’s gross domestic product held steady on month in February, easing from an upwardly revised 0.4% rise in January, data from the Office for National Statistics showed Thursday.

It fell behind expectations of a poll of economists by The Wall Street Journal, which saw the economy expanding 0.1%.

However, the U.K. did register a small 0.1% rise in GDP in the three months to February, with monthly GDP now estimated to be 0.3% above prepandemic levels in February 2020, the ONS said.

A teachers’ and civil-service strike hit the education and public administration sectors in the month, which led to a slide in the level of activity; the ONS’s measure for education fell 1.7%, while for public administration it declined 1.1%.

Related: ‘We just wear blankets’: Inside Britain’s outrage over energy prices and the largest industrial action in decades

It meant the services sector as a whole fell 0.1% in February, swinging from the 0.7% rise in the first month of 2023.

Industrial production in February also fell 0.2%, weighed by the electricity, gas, steam and air-conditioning supply sector, according to ONS data. Manufacturing output flatlined in the month.

But the more volatile construction sector recorded a 2.4% rise in output in the month, following a 1.7% fall in January.

Economists continue to expect the U.K. economy to contract in the first quarter of 2023, weighed by high inflation and Bank of England interest rates that are squeezing household spending and investments. The economy is currently expected to contract 0.4% in 2023 as a whole, according to economists polled by FactSet.

Write to Ed Frankl at edward.frankl@wsj.com

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