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UK economy showed no growth in April, official figures reveal

12 Jun 2024 4 minute read
Photo Ben Birchall/PA Wire

The UK economy recorded no growth in April after wet weather dampened consumer spending, according to the Office for National Statistics.

Gross domestic product (GDP) was flat during the month, following growth of 0.4% in March, the ONS said. The figure was in line with economist’s expectations.

The figures present a headache for Prime Minister Rishi Sunak, who has pegged much of his General Election campaign on a recent record of an economic bounceback under his Conservative government.

The sluggish momentum follows an estimated 0.6% GDP growth in the first quarter of 2024, pulling the UK out of a small recession at the end of last year.

Interest rates

It also comes just over a week before the Bank of England makes its next decision on interest rates.

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

Rob Wood chief UK economist at Pantheon Macroeconomics, said: “These growth data further complicate the MPC’s upcoming interest rate decisions. Rate setters will keep rates on hold in June, but now a cut in August looks a little less likely.”

On a quarterly basis, real GDP is estimated to have grown by 0.7% in the three months to April, compared with the three months to January 2024.

Luke Bartholomew, deputy chief economist at asset management giant abrdn, said monthly GDP data can be volatile, urging people to “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.”

Output

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

Construction output fell by 1.4% in April, its third consecutive monthly fall.

Shadow chancellor Rachel Reeves said: “Rishi Sunak claims we have turned a corner, but the economy has stalled and there is no growth.

“These figures expose the damage done after 14 years of Conservative chaos.”

Liberal Democrat Treasury spokeswoman Sarah Olney said the lack of growth in April showed the Tories had “utterly failed” to deliver on their promises.

“As Rishi Sunak’s time as prime minister peters out, so does the UK’s economic growth,” she said.

Chancellor of the Exchequer Jeremy Hunt said: “There is more to do, but the economy is turning a corner and inflation is back down to normal.”

He added that the Conservatives would “keep the economy growing with our clear plan to cut taxes on work, homes and pensions”.

Peter Arnold, chief UK economist at consultant EY, said: “Monthly GDP data can be noisy and the focus placed upon individual outturns should therefore be measured.

“Indeed, after three strong month-on-month gains, it was always likely that there would be some payback in April, and a flat outturn beat our expectations.

“Looking through this volatility, we expect GDP to grow at a decent pace in Q2. The drag on some sectors from an early Easter should unwind in May.”

Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said: “Despite these disappointing GDP figures, a June interest rate cut looks improbable, with the Bank of England likely to be a little wary of shifting policy in the middle of a General Election campaign.”

Nicholas Hyett, investment manager at Wealth Club, said: “The market had low expectations for the UK economy in April, and it duly delivered.

“In an election month, where every data release will be being watched closely, there’s little here to change the narrative.”


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Mawkernewek
Mawkernewek
1 month ago

I thought the ONS was just supposed to report the statistics, now it seems it sees a need to get the excuses in for the government by blaming the weather.

Steve A Duggan
Steve A Duggan
1 month ago

Why did the UK join the Common Market in the 1970s ? Because our economy was declining. Leaving the EU now has once again highlighted just how bad a shape the economy is still in. Brexit is the fundamental reason why the country is bumping along at the bottom. Yes, there have been other factors too, like Covid and the war in Ukraine, but other countries have faced these issues too and their economies are now growing faster than the UK. A reality check has to start to kick in with politicians – leaving the EU has been a complete… Read more »

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