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UK economy stalls in April, official data shows

Credible News by Credible News
June 12, 2024
in Development, Economy, Foreign, Human Interest, News
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UK economy stalls in April, official data shows
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The UK economy recorded no growth in April, according to the Office for National Statistics.

Gross domestic product, GDP, was flat during the month, following growth of 0.4 per cent in March, the ONS said.

The sluggishness emerged after the economy recorded its fastest growth in two years from January to March.

The data also followed labour market data on Tuesday that showed falling employment and rising unemployment, but continued strong wage growth.

The figures present a headache for Rishi Sunak, who has pegged much of his general election campaign on a recent record of economic improvement under his Conservative government.

The data comes before the Bank of England makes its next decision on interest rates next week.

Experts have predicted the Bank’s Monetary Policy Committee is unlikely to lower interest rates without further progress on inflation and a cooling in the labour market.

Economists had predicted that GDP would be flat in April, held down by weaker-than-usual retail sales over the Easter period.

It comes after the economy grew by an estimated 0.6 per cent in the first quarter of 2024, pulling the UK out of a small recession at the end of last year.

READ ALSO: UK’s Rishi Sunak pledges to introduce immigration cap if re-elected

On a quarterly basis, real gross domestic product is estimated to have grown by 0.7 per cent in the three months to April, compared with the three months to January 2024.

Growth in April was driven by the services sector, with information and technology and the professional and scientific expanding rapidly. However, manufacturing and construction output, both down 1.4 per cent in monthly terms, performed worse than forecast.

Luke Bartholomew, deputy chief economist at asset management giant abrdn, said monthly GDP data can be volatile, and that it is ‘important not to put too much stead in just one month of data and look at the broader trend across several months.’

He added: ‘And on that measure, a picture of solid recovery from last year’s recession emerges. This should continue as the year progresses as households benefit from strong real income growth amid falling inflation.’

Services output grew by 0.2 per cent in April, the fourth consecutive month of growth, while production output fell by 0.9 per cent in April following growth of 0.2 per cent in March.

Construction output fell by 1.4 per cent in April, its third consecutive monthly fall, and was down by 2.2 per cent in the three months to April.

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