UK Economy Growth Slows in April, but Some Sectors See Positive Signs

Recent statistics published on Wednesday have shown that the UK economy experienced a slowdown in growth in April, halting the modest rebound from last year’s recession. While economists had anticipated a flattening out of growth after a 0.4% increase in March, this was not the case. Over the longer term, however, there was a 0.7% increase in GDP over the three months leading up to April.

Despite this overall slowdown, there were some positive signs for certain sectors. The services sector saw a 0.2% expansion, indicating some momentum. On the other hand, construction output declined by 1.4% for the third consecutive month and production output was down by 0.9%.

Lindsay James, an investment strategist at Quilter Investors, attributed the April slowdown to persistent rainy weather that kept consumers from spending. Although the weather has since improved, James believes that it will take time for the second quarter to make up for any lost growth if it is to match the 0.6% seen in the first quarter.

The first quarter’s growth led to speculation about interest rate cuts by the Bank of England in June. However, market expectations have shifted and it now seems unlikely that an announcement will be made this month due to labor data released on Tuesday showing unexpected rises in UK unemployment rates as well as higher-than-expected wage growth at 6%.

The Bank of England is set to meet on June 20th to discuss its monetary policy going forward