The UK economy experienced a halt in growth for April, largely due to significant rainfall that adversely affected consumer spending. This period of stagnation followed a notably strong first quarter, further complicating the political landscape as major parties prepare for the general election on 4 July.
This stagnation follows the UK recording its fastest economic growth in two years from January to March, pulling the country out of a recession experienced in the latter half of the previous year. The economic performance remains a crucial issue for political parties in the run-up to the general election. Despite a four-month consecutive increase in spending on services, declines in the production and construction sectors offset these gains.
While the UK’s gross domestic product (GDP) grew by 0.4% in March, certain service sectors, particularly information, communication, and the scientific sectors, experienced substantial growth. Conversely, the retail trade suffered due to the wet weather, which saw rainfall well above the long-term average. Consumer-facing services exhibited a 0.7% decline in output, reflecting ongoing struggles with high living costs. However, economists caution against over-interpreting monthly economic fluctuations, highlighting influences such as weather or holiday timing.
Overall, the economy demonstrated a 0.7% growth over the three months to April, compared to the February to April period. These statistics will be crucial for the Bank of England’s upcoming meeting, where interest rate decisions will be deliberated. Many households are still grappling with financial pressures stemming from rising energy and food prices, alongside higher mortgage payments due to increased interest rates. The central bank has been hiking rates to control inflation.
The latest data has emerged amid the third week of election campaigning, with economic promises being central to party platforms. Chancellor Jeremy Hunt optimistically interpreted the data, indicating that the economy “is turning a corner.” He emphasised, “Under the Conservatives, we can keep the economy growing with our clear plan to cut taxes on work, homes, and pensions.” In contrast, Labour’s Shadow Chancellor Rachel Reeves criticised the flat growth in April, pointing to the long-term impact of Conservative policies, stating, “These figures expose the damage done after fourteen years of Conservative chaos.” Liberal Democrat Treasury spokesperson Sarah Olney added to the political discourse, “As Rishi Sunak’s time as prime minister peters out, so does the UK’s economic growth.”
In conclusion, the stagnation of the UK economy in April, attributed to adverse weather conditions, underscores the broader political and economic challenges as the general election approaches. The contrasting views of political leaders further illustrate the heightened economic stakes in the upcoming electoral debates.
