Closing post
Time for a recap…
The UK economy flatlined in April, held back by wet weather, as the signs of a recovery from last year’s recession began to fade.
In a blow to Rishi Sunak’s hopes of signalling a strong bounceback before the general election on 4 July, the Office for National Statistics (ONS) said monthly growth slowed after a 0.4% increase in March.
The economy was unable to maintain its momentum after being weighed down by the struggling retail sector, a downturn in manufacturing and a drop in construction output.
The 0.0% growth figure matched the forecast by City economists, who blamed the month’s heavy rains for difficulties faced by workers on building sites and the lack of shoppers on the high street.
Sunak really can’t catch a break, says our economics editor Larry Elliott:
The latest growth figures are not strong enough for him to boast about on the campaign trail but not weak enough to persuade the Bank of England to cut interest rates next week.
City economists pointed out that the economy did grow over the last three months, by 0.7%, suggesting the recovery was holding up.
But unions blamed the government for the UK’s weak economic performance over several years.
Meanwhile in America, inflation has cooled slightly – triggering a rally in stocks and bonds, and a weakening of the US dollar.
The consumer price index rose at annual pace of 3.3% in May, slipping back from the previous month’s reading of 3.4%.
In other news…
The world is on track for a major oil surplus by the end of the decade, according to the International Energy Agency.
The EU has notified Beijing that it intends to impose tariffs of up to 38% on imports of Chinese electric vehicles.
Analysis: Another washout for Rishi Sunak as rain dampens UK growth
Rishi Sunak must be cursing the British weather, writes our economics editor Larry Elliott:
He got soaked to the skin when announcing the general election outside 10 Downing Street last month. Now it appears wet weather has brought a halt to the UK’s economic recovery.
Statisticians always caution against reading too much into a single month’s figures and on a quarterly basis things don’t look too bad for the prime minister. Indeed, the economy expanded by 0.7% in the three months to April, compared with 0.6% in the quarter ending in March.
But during an election campaign each piece of economic data takes on heightened importance and Labour was quick to exploit the fact that there was zero growth in April. Rachel Reeves, the shadow chancellor, said it exposed the damage caused by 14 years of “Conservative chaos”.
