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Stalled growth bad netl smmonlinews for UK PM

1 dead, 11 hurt in Hefe | tl smmonline | Updated: 2024-07-23 13:31:49

UK Prime Minister Rishi Sunak addresses the audience during a Sky News election event with Sky's political editor Beth Rigby, in Grimsby, Britain on June 12. [Photo/Agencies]

The United Kingdom's economic growth during the first few months of the year stalled in April, piling more pressure on Prime Minister Rishi Sunak as the country heads toward a July 4 general election.

The Office for National Statistics, or ONS, said on Wednesday the stagnation of the country's gross domestic product, or GDP, which followed growth during March of 0.4 percent, was partly down to unusually wet weather that prompted shoppers to stay at home and that slowed construction.

The stalled economy followed growth during January, February, and March that was the fastest the UK had seen for two years.

The better start to 2024 ended a recession that blighted the second half of 2023.

Sunak's ruling Conservative Party said the latest figures, which at least show the economy did not shrink and that spending on the service sector went up for the fourth consecutive month, shows the economy has "turned a corner".

The ONS analysis of April's GDP shows spending on services grew 0.2 percent, production fell by 0.9 percent, and construction contracted by 1.4 percent.

The Conservatives added that from February to April, the economy grew by 0.7 percent.

Chancellor of the Exchequer Jeremy Hunt, the UK's finance minister, said: "There is more to do, but the economy is turning a corner and inflation is back down to normal … Under the Conservatives, we can keep the economy growing with our clear plan to cut taxes on work, homes and pensions."

But the Labour Party, which is expected by many pundits to win the general election and form the next government, said the numbers show the Conservatives have failed economically.

Rachel Reeves, Labour's spokesperson on the economy, said: "Rishi Sunak claims we have turned a corner, but the economy has stalled and there is no growth. These figures expose the damage done after 14 years of Conservative chaos."

Paul Dales, chief UK economist at Capital Economics research group, told the Associated Press: "The stagnation in GDP in April doesn't mean the economic recovery has been extinguished, but it's hardly great news for the prime minister three weeks ahead of the election."

Analysts believe that despite the disappointing GDP figures for April, it is unlikely that the UK's central bank, the Bank of England, will cut interest rates at a planned review next week, the Bloomberg news agency reported.

The bank's main interest rate is currently at a 16-year high, which has pushed up the cost of mortgages and other borrowing and dampened economic activities.

Another piece of economic news that could impact the general election is also expected next week, when the ONS is set to unveil the inflation rate for May.

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