UK GDP stagnates in April, economy turns on claims – business alive | economic growth (GDP)

The British economy was dragged down by the factory sector and construction in April.

ONS says:

• Services output rose 0.2% in April 2024, the fourth consecutive monthly rise, and also rose 0.9% in the three months to April 2024.

• Output fell 0.9% in April 2024 after rising 0.2% in March 2024, but rose 0.7% in the three months to April 2024.

• Construction output fell 1.4% in April 2024, the third straight monthly decline, and fell 2.2% in the three months to April 2024.

Newsflash: The UK economy stagnated in April, a blow to Rishi Sunak’s claims that it had turned the corner.

UK GDP was unchanged month-on-month in April, new figures from the Office for National Statistics show, after rising 0.4% in March.

That’s in line with the City’s expectations and shows the economy struggled to maintain momentum in April after exiting recession in the first quarter of 2024.

Today’s GDP report will paint a picture of the UK domestic economy, he says Thomas Watts, investment analyst in the company abrdn Portfolio Solutions, and the one voters will pay attention to:

GDP is often considered the broadest measure of an economy’s health, measuring the change in the total value of all goods and services produced by a country. With the UK having just exited a shallow recession and economic growth re-entering positive numbers, many will be hoping this trend can continue.

The data also assumes importance as it acts as one of the last big economic data ahead of the upcoming general election and is sure to influence the mindset of voters when they go to the polls.

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Rishi Sunak’s claim that “the economy has turned a corner” is about to be tested.

New gross domestic product figures, due at 7am, will show how the UK economy fared in April.

It’s the last official check on UK economic growth before the election, a day after we learned that unemployment rose in the February-April quarter.

Overall, the city expects no growth during the month when bad weather hit retail sales.

A Reuters poll of economists found the consensus forecast was for a 0% change in GDP in April. However, there is a range of forecasts – from an optimistic growth of +0.2% to a gloomy -0.3%.

Even the top of those forecasts would be a slowdown compared to March, when the UK grew by 0.4%, helping the economy out of recession.

German bankBritain’s chief economist, Sanjay Rajais among those predicting stagnation in April, saying:

After a tumultuous end to Q1-24, we expect the UK economy to begin to stagnate as we enter Q2-24. We believe UK GDP is likely to stagnate in April due to declines in both the services and manufacturing sectors.

Risks are biased to a slightly stronger print, according to our current reports.

Jefferies‘economists Modupe Adegbembo and Mohit Kumar expect growth of 0.2% in April, which tells clients:

Growth momentum remains strong in the UK, but monthly figures tend to be volatile and affected by factors such as the weather. The UK saw one-and-a-half times more rain than usual in April, likely dampening activity in construction and services.

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• 7:00am BST: UK GDP report for April

• 7:00am BST: UK trade report for April

• 7:00am BST: German CPI inflation report for May

• 13:30 BST: US CPI inflation report for May

• 19:00 BST: US central bank (Fed) sets US interest rates