The speed at which the UK economy grew slowed significantly in February as the cost-of-living crisis took hold, new data showed. The Office for National Statistics said gross domestic product increased by 0.1 per cent in February, compared with a rise of 0.8 per cent in January. This was below a rise of 0.3 per cent predicted by economists. Growth was reported in the hospitality and leisure sectors, as Omicron coronavirus infection numbers fell compared with December and January. But GDP was hit as <a href="https://www.thenationalnews.com/tags/uk-government/" target="_blank">government</a> spending on the NHS Test and Trace system and vaccination booster programme slowed in February. There were also slowdowns in construction industries, as business confidence took a knock. The cost-of-living crisis and high energy bills made companies uneasy about making significant investments. Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: “While economic output continued to rebound in February, the significant slowdown in growth indicates that the UK economy was losing steam even before the impact of Russia's invasion of Ukraine. “<a href="https://www.thenationalnews.com/travel/2022/02/05/dubai-most-booked-holiday-destination-from-uk-in-2022/" target="_blank">Tourism-related industries and accommodation services recorded the strongest improvements in the month</a> as the end of Plan B restrictions, and reduced concerns over Omicron, supported activity. “However, this was mostly offset by a significant drop in NHS Test and Trace services and vaccine activity, as well as declines in industrial and construction output.” “February's slowdown is likely to be the start of a prolonged period of considerably weaker growth as rising inflation, surging energy bills and higher taxes increasingly damages key drivers of UK output, including consumer spending and business investment,” Mr Thiru said. The driver of growth for the economy during the month of February came from the services sector, up 0.2 per cent, with the ONS saying there were increases in travel agency, tour operator and other reservation services which were up 33.1 per cent on the month. Growth in accommodation and food services was up 8.6 per cent in February, with healthy figures in hotel bookings as the Omicron variant faded and people took breaks. The biggest negative contributor in consumer services was the motor industry, where sales of cars and repairs were down. This also affected car factories, which experienced slowdowns, along with falls in the manufacturing of computers and other electronics, where chip shortages continued. Overall, the services are now 2.1 per cent above pre-Covid levels, with construction up by 1.1 per cent. But production is now 1.9 per cent below pre-pandemic levels. Alpesh Paleja, lead economist at the Confederation of British Industry, said: “Following the bounce at the start of the year, it's no surprise that economic growth slowed in February. “Near-term challenges to the outlook have ramped up since, with a growing cost-of-living crunch set to weigh on growth. “Businesses are also grappling with headwinds from the Ukraine conflict, which is exacerbating cost pressures and supply chain disruption.” Chancellor Rishi Sunak welcomed the figures for February, which he said showed continued recover from the pandemic, boosted by government policy. “Russia's invasion of Ukraine is creating additional economic uncertainty here in the UK, but it is right that we are responding robustly against Putin's unprovoked invasion,” he said.