British Economy Stagnates in April, Impacting Prime Minister Sunak's Election Campaign

The British economy showed no growth in April, dealing a setback to Prime Minister Rishi Sunak as he gears up for the election. Wet weather, slowing construction, and tepid consumer spending combined to create a flat monthly reading, contrasting the 0.6% growth seen in the first quarter.

PTI | London | Updated: 12-06-2024 16:33 IST | Created: 12-06-2024 16:33 IST
British Economy Stagnates in April, Impacting Prime Minister Sunak's Election Campaign
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The British economy failed to grow in April, official figures showed on Wednesday, delivering a setback to Prime Minister Rishi Sunak. He has centered the return of growth and economic stability as key pillars of his Conservative Party's election campaign.

The Office for National Statistics (ONS) reported that wet weather dampened consumer spending and construction activities for the month. The stagnant monthly reading follows a 0.6% increase recorded during the first quarter of the year, previously lauded by Sunak on the campaign trail.

Despite the vulnerability of monthly figures to short-term factors, this flat reading is expected to be leveraged by Conservative opponents ahead of the July 4 election. While Treasury chief Jeremy Hunt claimed the "economy is turning a corner," Labour Party counterpart Rachel Reeves insisted the "economy has stalled."

The latest growth data precedes the upcoming inflation report and the Bank of England's next interest rate decision. Optimism within the Conservative Party for a rate cut has faded due to inflation rates not dropping as significantly as expected. While inflation stands at an annual rate of 2.3%, it remains slightly above the bank's target and is anticipated to increase marginally in the coming months.

High interest rates have eased inflation but have also put pressure on the British economy. "A June interest rate cut looks improbable, with the Bank of England likely cautious about altering policy amidst an election campaign," said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.

On Tuesday, Sunak pledged in the Conservative Party manifesto to cut taxes and reduce immigration if re-elected. Labour, currently leading in opinion polls, is scheduled to release its manifesto on Thursday.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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