Chance of recession up as GDP plummets

Chance of recession up as GDP plummets

New figures from the Office for National Statistics (ONS) show the UK economy contracted by 0.3 per cent in April.

This came alongside the hikes to National Insurance contributions at the same time as the energy price cap rose, along with council tax in many local authorities.

The GDP decrease was above what experts had predicted after March’s 0.1 contraction.

Overnight the CBI downgraded its GDP growth predictions for this year from 5.1 to 3.7 per cent.

The ONS say the scrapping of government-funded Covid testing was partly responsible for the figures, although the impact was visible across all significant industries.

Later this week the Bank of England’s Monetary Policy Committee is set to hike interest rates by 25 basis points to 1.25 per cent.

Labour’s shadow chancellor Rachel Reeves said the fresh figures will “add to the worry families are still feeling about their own finances and the long term health of our economy”.

“They will also add to growing concern about abysmal growth and plummeting living standards under the Conservatives. Instead of properly addressing the structural weaknesses and insecurity they’ve created, all the Conservatives use are sticking plasters,” she went on, claiming that her party: “will create a stronger, more secure economy by boosting our energy security, supply chain security and business security.”

Liberal Democrat Treasury spokesperson Christine Jardine MP argued that the government’s “barrage of tax hikes and lack of cost-of-living support are leaving people to suffer.”

TUC General Secretary Frances O’Grady blamed falling consumer spending for the figures, accusing the government of “treating workers like Oliver Twist and telling them not to ask for a decent pay rise.”

Chancellor Rishi Sunak has echoed the previous government lines that global circumstances are to blame for climbing prices and poor growth. 

“Countries around the world are seeing slowing growth, and the UK is not immune from these challenges.

“I want to reassure people, we’re fully focused on growing the economy to address the cost of living in the longer term, while supporting families and businesses with the immediate pressures they’re facing,” Sunak stressed this morning

He went on to claim that the government has “a plan to turbocharge productivity through investment in capital, people and ideas, so everyone across the country can benefit from a strong, healthy economy.”

Environment secretary George Eustice admitted on today’s broadcast round that the country faces  “some real challenges ahead”.

He explained to Sky News: “We’ve known for some time this was going to be a challenge.

“We’ve got unemployment that’s at record lows, the lowest it’s been since 1974, but of course there are some real challenges ahead and these GDP figures are a reminder of those challenges,” he added.

 

The post Chance of recession up as GDP plummets appeared first on Politics.co.uk.

Source: Politico.co.uk.

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