Growth in UK’s economy stalls in April according to official figures
The UK’s economy failed to grow in April due to a fall in consumer spending.
The Office for National Statistics (ONS) said there was no growth for the month, which was in line with many economists’ predictions.
The halt in growth came after the UK economy recorded its fastest growth in two years from January to March.
The positive figures at the start of the year meant the UK had exited the recession it fell into in the final half of last year.
Spending on services grew for the fourth month in a row, but this was offset by falls in production and in the construction industry.
The news will come as a blow to Rishi Sunak who has placed the recovery in the economy at the heart of his election strategy.
Mike Randall, chief executive at Simply Asset Finance said: “The UK’s slow crawl toward economic recovery shines a spotlight on the challenges facing businesses up and down the country.
“With political parties setting out their stall in the lead-up to the election, far too little attention has been paid to what SMEs need to start, develop, and succeed.
“There is no shortage of ambition or ingenuity in the UKs business sectors. But they are still too often starved of funding, lacking access to skills, and hamstrung by productivity challenges. If we want the UK to rebuild its economic resilience, it’s imperative that the right conditions are created for SMEs to thrive. Failure to prioritise this, by whoever has the keys to Number 10 come July 5th, is unacceptable.”
Professor Joe Nellis, MHA’s economic advisor and professor of global economy, at Cranfield School of Management, added: “The flat figure for April GDP data while expected given activity tends to slow down around bank holidays is still disappointing. While the economy has recovered from a ‘technical recession’ last year, growth is likely to remain sluggish for some time.
“There may be more positive news on GDP later in the year given that UK construction and manufacturing PMI data have been steadily improving since the beginning of the year and they are a good lead indicator as to what we can expect in the medium term.
“However, today’s data shows that the UK economy is still in a precarious position and we remain sceptical about the affordability of major tax cuts, with so many potential bumps in the road in the second half of the year and beyond.
“Whoever picks up the keys of 10 Downing Street on July 5 will have to face up to the reality of an economy that while no longer in crisis has some significant challenges ahead.”
Danni Hewson, head of financial analysis at AJ Bell, said: “April’s lack of growth should come as no surprise. ‘Rain stopped play’ is the best way to describe things as builders shunned roof tops and shoppers deserted high streets in favour of their warm, dry sofas.
“The long-term trend for construction is more worrying. Output has fallen for three consecutive months and there’s little surprise that so much focus has been placed on housebuilding by political parties, all hoping their policies can deliver a sustained growth spurt for the UK.
“But no growth is better than negative growth and taken alongside the latest wage figures there doesn’t appear to be much evidence to suggest that Bank of England ratesetters will feel ready to change course quite yet. And there’s already a frisson of excitement in the air that big events like the Euros and Taylor Swift’s Eras tour will help deliver a decent boost to the economic picture by the time we get the half-year result.
“With inflation cooling and wage growth now being felt in people’s pay packets there is a sense that the momentum seen at the start of the year is likely to return. The trick will be keeping the engine running smoothly, putting in the right kind of fuel and the right kind of investment to get us out of neutral and into a much higher gear.”
