UK economy grows 0.2% in April driven by pubs and car sales
The United Kingdom’s economy experienced growth in April, with a 0.2% increase following a 0.3% contraction in March, according to the Office for National Statistics (ONS). The data revealed a 0.1% growth over the three months leading up to April. ONS Director of Economic Statistics, Darren Morgan, attributed the bounce back to strong performance in bars and pubs, a rebound in car sales, and a partial recovery in education after the previous month’s strikes. However, the health sector, computer manufacturing, and the pharmaceuticals industry experienced declines.
The recent growth update comes after the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) upgraded their UK economic expectations in recent weeks. Both organisations had initially predicted a recession in 2023. Despite the positive outlook, the anticipated growth for this year only amounts to a few tenths of a per cent, with high inflation heavily denting confidence to spend and invest.
The Bank of England is expected to address the pace of rising prices by implementing another interest rate hike next week. Policymakers are concerned about the stubbornly high core inflation, which excludes volatile elements such as energy and food. Wage data released on Tuesday showed a sharp increase, intensifying worries that wage settlements to combat inflation will exacerbate the UK’s price pressures.
Chancellor Jeremy Hunt commented on the ONS economic data, stating, “We are growing the economy, with the IMF saying that from 2025 we will grow faster than Germany, France and Italy. But high growth needs low inflation, so we must stick relentlessly to our plan to halve the rate this year to protect family budgets.” In response, Labour Shadow Rachel Reeves said, “Labour wants to match the ambition of the British people – while the Tories would rather continue down a path of managed decline of low growth and high taxes.”
Reeves continued, “Despite our country’s huge potential and promise, today is another day in the dismal low growth record book of this Conservative government. The facts remain that families are feeling worse off, facing a soaring Tory mortgage penalty and we’re lagging behind on the global stage. Labour’s mission to secure the highest sustained growth in the G7 will make families across every part of our country better off.”
