In April, the British economy showed no growth, according to official figures published on Wednesday, dealing a blow to Prime Minister Rishi Sunak. Sunak has been emphasizing the importance of economic growth in his campaign as a central pillar of the Conservative Party’s election strategy. The Office for National Statistics attributed the stagnant growth to wet weather affecting consumer spending and construction during the month. This followed a 0.6% increase in the first quarter of the year.
While the monthly figures are influenced by short-term factors, the flat reading is likely to be used by political opponents of the Conservatives in the lead-up to the upcoming election on July 4. Treasury chief Jeremy Hunt claimed that the economy is starting to recover, but Labour Party’s Rachel Reeves argued that it has stalled. The figures come ahead of the next round of inflation data and the Bank of England’s upcoming interest rate decision.
Expectations for the Bank of England to lower its main interest rate have waned after inflation did not decline as much as anticipated in April. Inflation currently stands at 2.3%, slightly exceeding the bank’s target, and is forecasted to rise slightly in the coming months. The high interest rates, while aiding in curbing inflation, have also put strain on the British economy. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, suggested that a rate cut in June is unlikely due to the ongoing election campaign.
On Tuesday, Sunak promised tax cuts and reduced immigration in the Conservative Party’s government manifesto for reelection. Labour, currently leading in opinion polls, is set to release its manifesto on Thursday.