Britain’s economy fell in April, slowed by wet weather, as signs of recovery from last year’s recession began to fade.
In a setback to Rishi Sunak’s hopes of a strong recovery before the July 4 general election, the Office for National Statistics (ONS) said monthly growth slowed after rising 0.4% in March.
The economy failed to maintain its momentum after being burdened by the struggling retail sector, a slump in manufacturing and a drop in construction output.
The 0.0% growth rate matched the forecast of city economists, who blamed the month’s heavy rains for the problems faced by workers on construction sites and the lack of shoppers on the high street.
Shadow Chancellor Rachel Reeves said: “Rishi Sunak claims we have turned a corner, but the economy has come to a standstill and there is no growth.”
Sunak said in March that the economy would “recover” from a recession in 2023. Commenting on Wednesday’s figures, a Conservative Party spokesperson said: “There is more to do but the economy is turning a corner and inflation is back decreased. to normal.”
Industrial production fell 1.4% month-on-month in April, while construction activity was 1.4% lower and retailers lost 2% of their business. These declines were offset by a 2% increase across the services sector, boosted by increases in IT and communications services, professional businesses (1.2%) and arts and entertainment (2.6%).
Trade Union Congress general secretary Paul Nowak said the stagnation of the economy is causing long-term damage to household incomes. “Our economy is slowing down again,” the TUC leader said. “This has been the worst government for growth in modern times – and working people have paid the price.”
He said analysis of official figures showed annual growth since 2010 had averaged 1.5%, the worst performance for any government since the Great Depression. Wages were worth less than in 2008, taking inflation into account, Nowak added, and unemployment had risen at the fastest pace in the G7 this year. “The Conservatives can run whatever they want. But the last fourteen years have been bleak for growth and living standards.”
Paul Dales, the British chief economist at the consultancy Capital Economics, said the economy could return to growth in the summer. “Despite the stagnation of the recovery in April, the double drag on economic growth caused by higher interest rates and higher inflation will continue to fade throughout the year. That will provide some economic tailwind for the next government,” he said.
Separate surveys of private sector companies show that most parts of the economy have grown month on month since the start of the year.
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Figures released last month show the economy grew by 0.6% in the three months to the end of March – the strongest quarterly growth rate since late 2021 – confirming Britain has officially emerged from recession after the economy had shrunk in the second half of last year. year.
In the three months to the end of April, growth was 0.7%, the same level the International Monetary Fund had predicted in its half-yearly spring outlook for the whole year.
The Organization for Economic Co-operation and Development (OECD) recently cut its forecast for UK growth this year from 0.7% to 0.4%. The Paris-based organization said longer-term problems facing Britain, including a major skills shortage, high retail prices and high interest rates, were responsible for the bleak outlook.
Suren Thiru, director of economics at the Institute of Chartered Accountants in England and Wales, said zero growth in national income, or gross domestic product (GDP), in April is unlikely to encourage the Bank of England to cut interest rates during her meeting later. this month. “Despite these disappointing GDP figures, a rate cut in June appears unlikely, with the Bank of England likely to be a little wary of policy changes in the middle of a general election campaign,” he added.