UK April GDP Down 0.3% Month-on-Month... Worse Than Expected

Interest Rate Hike Expected This Week Despite Economic Slowdown

Photo by Yonhap News

[Asia Economy Reporter Hwang Seoyul] Concerns about an economic recession are growing as the UK's GDP in April declined compared to the previous month.

The UK's Office for National Statistics (ONS) announced on the 13th (local time) that the gross domestic product (GDP) in April decreased by 0.3% compared to the previous month. Experts surveyed by major foreign media had estimated a 0.1% increase, so the result was worse than expected.

The ONS explained that the main reason for the lower growth rate was a 5.6% decrease in the health sector GDP due to reduced COVID-19 testing. Excluding this factor, the overall GDP increased by 0.1%, according to the ONS. Additionally, the ONS stated that many responses indicated that rising production costs affected businesses in April.

Rishi Sunak, the UK Chancellor of the Exchequer, said, "The pace of global economic growth is slowing, and the UK is no exception."

However, the Organisation for Economic Co-operation and Development (OECD) forecasted the UK's economic growth rate for next year to be 0%. This is the lowest among the Group of Twenty (G20) countries except for Russia.

Despite the economic slowdown, financial markets expect the Bank of England (BOE), the UK's central bank, to raise the base interest rate by 0.25 percentage points from 1.25% on the 16th. The BOE has raised rates four times since December last year in response to rising consumer prices.

This content was produced with the assistance of AI translation services.