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Rishi Sunak’s economic growth gets rained off in April

The UK economy has ground to a stop in April 2024 as the official growth figure was 0.0%, which is a huge blow to Rishi Sunak and the Tory party ahead of next month’s general election.

Official figures from the Office for National Statistics released yesterday shows that the previous month’s growth of 0.4% in the year to March was halted in April. The economy was showing promising signs of recovery which the Prime Minister was extremely happy to announce to the British public last month.

The economic growth has ground to a complete halt in the year to April with a reported 0.0% change, which was a direct result of the bad weather and poor retail performance. The momentum that was building up to last month has also been halted because of a significant drop in the construction industry performance.

Sky News recently reported on economic changes for the UK, having anticipated a return for the ‘economic feel-good factor’ ahead of the general election.

Will the economic feel-good factor return before the general election?

City economists had previously predicted the 0.0% growth, blaming the results on the continued poor weather and heavy rain which has been a direct link to a poor retail performance with a lack of shoppers on our high streets, and problems faced by the construction industry and its workers.

Official figures showed that the retail sector lost 2% of its trade in April, with manufacturing falling by 1.4%, and the same for construction which also reported 1.4% losses. Other sectors had reported growth with the IT and communication services industry, professional businesses, and the entertainment industry all showing growth between 1.2% and 2.6%.

In summary, the Tory government now come under increasing pressure to act fast and re-ignite our economic recovery before the general election on 4th July 2024. A spokesperson for the Tory’s said that “there is more to do, but the economy is turning a corner and inflation is back down to normal”.

The Shadow Chancellor, Rachel Reeves, said that the poor performance and weaknesses in our economy in 2024 was just a recovery from lost ground in 2023. Suggesting that this is not actual growth and simply a recovery from previous losses.

What does this mean for mortgage interest rates?

The pause in economic growth in the UK is likely to have a knock-on effect on mortgage interest rates over the coming months. Previous projections had suggested that there could be a reduction in the Bank of England Base Rate (BBR) as early as July.

The mortgage interest rate has held at 5.25% for the past 3 months and looks unlikely to change in the coming months. Representatives from the Monetary Policy Committee have already suggested that there will be no change in this months interest rate review.

Retail mortgage rates have already started to creep back Northwards as some lenders take a more cautious approach to lending for the coming months.

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