Hopes of the United Kingdom shaking its late 2023 technical recession appear to have been short-lived, after grim real gross domestic product (GDP) figures from the Office for National Statistics (ONS) this morning.
According to the ONS, the UK economy stalled in April, showing no growth whatsoever, showing 0% figures versus the 0.4% growth seen in March 2024.
Declining production and construction
This morning’s data also showed that production output in the UK fell by 0.9% in April 2024 following growth of 0.2% in March 2024, but grew by 0.7% in the three months to April 2024.
Construction output in particular was single out as a poor performer by the ONS. It fell by 1.4% in April 2024, its third consecutive monthly fall, and fell by 2.2% in the three months to April 2024.
This was reportedly due in part to an unseasonable amount of rain in the quarter, affecting building processes around the country.
Not so fast
This comes just after economists breathed a sigh of relief for the UK last month, when real GDP was estimated to have grown by 0.7% in the 3 months to April 2024, compared with the 3 months to January 2024.
Prior to this, the UK had been on the brink of technical recession, after having already experienced a prior technical recession during early 2023.
Silver services lining
In the one bit of good news this morning, the ONS also reported that services output grew by 0.2% in April 2024, its fourth consecutive monthly growth, and also grew by 0.9% in the three months to April 2024.
However, the ONS also added somewhat worryingly that:
Output in consumer-facing services fell by 0.7% in April 2024, following growth of 0.7% in March 2024. The main driver to this fall was a fall of 2.3% in retail trade, except of motor vehicles and motorcycles”
A June interest rate cut?
The Bank of England is set to review interest rates, and announce and new changes, on June 20th later this month – just one day after the ONS releases June statistics on inflation for the UK on the 19th.
After recent inflation data showed CPIH to be falling significantly in the UK (from 3.2% annual inflation rate in March to just 2.3% in April 2024), today’s GDP figures may be the final nail in the coffin needed to persuade the BoE to cut interest rates from this month.
The post UK GDP: economic growth stalls to 0% recession fears re-emerge appeared first on Invezz