UK economy shrank 0.1% in April, ONS data shows
8 reported
The UK economy contracted by 0.1% in April, according to official figures from the Office for National Statistics, as the Iran war began to affect growth. The decline followed a 0.3% increase in March and was driven by a 0.2% fall in services output, partly offset by a 0.1% rise in construction. The ONS attributed the weak services output partly to the cancellation of multiple sporting events in the Middle East affecting UK-based businesses. Chancellor Rachel Reeves stated that before the conflict, growth was higher than expected and inflation was falling, adding that the economy is in a stronger position to deal with the war's costs. Over the three months to April, GDP growth was 0.7%. Economists expect the slowdown to intensify as higher energy costs feed through the economy, with the impact likely felt most acutely in the third quarter.
What’s reported
UK GDP contracted by 0.1% in April.
The decline followed a 0.3% increase in March.
Services output fell 0.2%; construction output rose 0.1%.
The ONS cited cancellation of multiple sporting events in the Middle East affecting UK-based businesses.
Over the three months to April, GDP growth was 0.7%.
Chancellor Rachel Reeves said the economy was strong entering the crisis and criticized Donald Trump’s role in the conflict.
The European Central Bank raised rates for the first time since 2023 in response to higher inflation from the Iran war.
Financial markets now expect only one quarter-point rate increase through the rest of the year.
Key figures
Rachel Reeves, Chancellor of the Exchequer
Fergus Jimenez-England, associate economist at the National Institute of Economic and Social Research
Thomas Pugh, chief economist at RSM UK
Keir Starmer, Labour leader
Andy Burnham, potential challenger to Starmer
Sources: The Guardian
