UK GDP did not grow at all during April this year, according to the latest figures from the Office for National Statistics (ONS), following an uptick of 0.4% during March.
Growth over the past three months to the end of April has reached 0.7% in aggregate, however.
During April, services output increased by 0.2%, marking the fourth consecutive month of growth. In contrast, production output fell by 0.9% during the month, although it has grown by 0.7% in total over the last three months. Construction output fell by 0.4% for the month, and has fallen by 2.2% over the last quarter.
As part of the ONS’s monthly survey, comments given by retail trade, as well as food and beverage service companies, said their output for the month shrank due to the rain.
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According to the Met Office’s Monthly Climate Summary, UK rainfall during April was 155% higher than the long-term average.
Lindsay James, investment strategist at Quilter Investors, said: “While the weather has thankfully improved of late, likely boosting May’s reading, the second quarter is off to a slow start and has a lot of catching up to do if it is to match the 0.6% growth seen in the first quarter. However, despite this renewed slowdown, it will likely not be enough for the Bank of England to cut interest rates next week.
“Wage inflation remains elevated and consumer price inflation is expected to tick higher in the coming months, and thus the BoE won’t want to deviate from its strategy just yet.”
Neil Birrell, chief investment officer at Premier Miton Investors and lead manager of the Premier Miton Diversified Fund range, pointed out that figures were still better than the small contraction which was expected.
However, he added: “That hides a weak outcome for manufacturing, construction and industrial production and a stronger than expected services sector. The latter might be driven by ongoing wage growth. No one set of numbers will drive the Bank of England’s interest rate decision, but they will now be looking to inject some stimulus as soon as they feel it is safe to do so.”
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