Fears of recession as UK economy as contracts

  • 14 Jun 2022

April figures reveal shock fall in GDP

The UK economy contracted by 0.3% in April, according to official figures released as fears rose of an inflation-driven recession.

The Office for National Statistics (ONS) had been expected by economists to confirm a slight rise in gross domestic product (GDP) for the month of 0.1% following a small decline in March.

 

The ONS said each main area of the economy contributed to April's decline but the contraction was mainly down to a pandemic-related anomaly which included the end of free COVID tests.

Its director of economic statistics, Darren Morgan, explained: "A big drop in the health sector due to the winding down of the test and trace scheme pushed the UK economy into negative territory in April.

"Manufacturing also suffered with some companies telling us they were being affected by rising fuel and energy prices.

"These were partially offset by growth in car sales, which recovered from a significantly weaker than usual March."

The Bank of England has warned the UK faces a "sharp economic slowdown", and has forecast that inflation - the rate at which prices rise - could reach more than 10% by the end of the year.

 

April was the first time all main sectors of the economy - services, manufacturing and production - had shrunk since January 2021.

The ONS said some businesses were continuing to struggle with the impact of price increases and supply chain shortages.

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