UK economy bounces back from negative growth

The economy saw a 0.2% advance in April, with the Service sector the principal driver of growth

14 June 2023

The UK economy bounced back marginally from the negative 0.3% growth seen in March, showing a 0.2% advance in April. The Service sector was the principal driver of growth with restaurants and bars accounting for a large uptick in activity over the month as consumers ventured out in April after hunkering down through the bad weather in March. It is perhaps quite a turnaround when most forecasters were expecting worse conditions for the UK economy at the start of the year with the effects of the healthcare, education and transport strikes. A more sobering assessment of the growth seen in April is that consumers are not overly daunted by higher prices having secured their wage growth demands. That could mean high prices will persist further, exerting further pressure on inflation and keeping the Bank of England’s (BoE) bias to further tightening. While a slowdown has been avoided in the short term, it is possibly what the BoE needs, without trying to sound too doom-ish in its never-ending battle with inflation.