image source, Getty Images
- Author, Mitchell Labiak
- Role, Business reporter
Britain’s economy did not grow in April after particularly wet weather put off shoppers and slowed construction.
The official data is what most economists expected and comes after the fastest growth in two years from January to March, which ended the recession of the last half of last year.
The economy is a key battleground ahead of the July 4 general election, with the main parties debating whether the latest figures point to continued recovery or stagnation.
The Conservatives say they show the economy has “turned a corner”, while Labor say they are “revealing the damage done”.
Figures from the Office for National Statistics (ONS) show spending on services, which include everything from hairdressing to hospitality, rose for the fourth month in a row.
However, this was offset by a decline in manufacturing and construction.
The UK’s gross domestic product (GDP), which measures the value of goods and services produced in a country over time, rose by 0.4% in March.
Some parts of the service industry fared better than others.
The information, communication and scientific sector grew the most, on the contrary, trade in shops fell.
The ONS said some retail businesses told them their output had been dented by the wetter weather, with the month’s rainfall well above the long-term average.
However, it added that it was “difficult to quantify the exact impact” of the rainfall.
Output in services for consumers, many of whom are still struggling to cope with steep increases in the cost of living, fell 0.7%.
Economists also caution against putting too much weight on shifts in economic activity over a month, as factors such as the weather or the timing of the Easter holiday can affect them.
In the three months to April, the economy grew by 0.7% from February to April.
The Bank of England will look at these figures, along with a number of others, next Thursday when it meets to decide what to do with interest rates.
However, most economists do not believe Wednesday’s update would have affected the decision much, as it was roughly in line with expectations.
Many people are not only struggling with higher utility and food bills, but also higher mortgage payments as interest rates have risen, raised by the central bank in an attempt to deal with rising prices.
One person who has seen the impact of rising prices firsthand is Mark Breen, who runs the Old Kent Roastery in Margate.
Despite his own costs rising, he hasn’t raised prices in years, fearing it would put off customers.
“We get some people, especially in the winter they come, have one coffee and sit here all day. It’s like that at the moment, people can’t afford to buy things.”
“I’m lucky, I have a business. We survive, but a lot of people don’t.”
The latest data comes from the third week of the campaign period, where promises to boost the economy played a key role.
Chancellor Jeremy Hunt said the data showed the economy was “turning a corner”.
“Under the Conservatives we can keep the economy growing with our clear plan to cut taxes on jobs, homes and pensions,” he added.
But Labour’s shadow chancellor Rachel Reeves took aim at April’s headline reading, saying: “These figures reveal the damage done after fourteen years of Tory chaos.”
Lib Dem Treasury spokeswoman Sarah Olney said: “As Rishi Sunak’s time as Prime Minister winds down, so does the UK’s economic growth.”
Economists had mixed views on what the latest numbers meant. Some said it was “positive” while others said it was “unbelievable”.
AJ Bell head of financial analysis Danni Hewson said “no growth is better than negative growth” but described the three-month decline in construction as “worrying”.
“It’s no surprise that political parties have paid so much attention to house building,” she added.