The UK economy managed weak growth in April, after having shrunk in the previous month, according to the Office for National Statistics.
British economic output grew by 0.2 per cent, month on month, in April, in line with economists' expectations, the ONS said.
Some of the strength came from improved business at restaurants and hospitality venues, while car sales rebounded in the month.
“These were partially offset by falls in health, which was affected by the junior doctors' strikes, along with falls in computer manufacturing and the often-erratic pharmaceuticals industry,” said Darren Morgan, director of economic statistics at the ONS.
“House builders and estate agents also had a poor month.”
The broader quarterly picture showed that the UK economy grew by 0.1 per cent in the three months to the end of April, the ONS said.
The services sector was the largest contributor to the rise in the overall gross domestic product number, growing by 0.3 per cent in April, after a 0.5 per cent fall in March.
Within the services sector, consumers set the stage for a bounce-back, with output in consumer-facing services growing by 1 per cent in April, after a drop of 0.8 per cent in the previous month.
The construction sector shrank by 0.6 per cent in April, after growing by 0.2 per cent in March.
Taming the inflation beast
Reacting to the GDP figures, Chancellor Jeremy Hunt repeated his plan to cut the rate of inflation in half, which is currently running at 8.7 per cent.
“We are growing the economy, with the IMF [the International Monetary Fund] saying that from 2025 we will grow faster than Germany, France and Italy,” Mr Hunt said.
“But high growth needs low inflation, so we must stick relentlessly to our plan to halve the rate this year to protect family budgets.”
Shadow chancellor Rachel Reeves from the opposition Labour said: “Despite our country's huge potential and promise, today is another day in the dismal low-growth record book of this Conservative government.
“The facts remain that families are feeling worse off, facing a soaring Tory mortgage penalty and we're lagging behind on the global stage.”
While a little impressed with the limited resilience of the UK economy in the GDP numbers, analysts said high inflation and borrowing costs are continuing to hold back growth.
“’With consumer spending holding up, particularly in hospitality, and the impact of strikes more minimal, the UK economy has eked out growth in April, but stubborn inflation is still casting a shadow over the slightly sunnier outlook,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“Although the UK continues to swerve a technical recession and buck earlier forecasts, the situation is fragile.”
Interest rates
With all eyes now turning to the Bank of England's meeting next week, another 0.25 per cent increase in interest rates to 4.75 per cent is now seen as inevitable, especially given the stronger-than-expected labour market numbers released on Tuesday.
The market is pricing in the possibility that rates could reach as high as 6 per cent by early next year.
“The figures will not be read with as much enthusiasm by the Bank of England as they continue to suggest an economy that is so far managing to shrug off the dampening effects of the 4.25 per cent of tightening delivered so far in the current tightening cycle as the Monetary Policy Committee struggles to bring inflation back under control,” said Stuart Cole, chief macro economist at Equiti Capital.
“Taken in conjunction with yesterday’s strong employment figures, the outcome of this month’s MPC meeting now looks to be a certain further increase in interest rates, and as monetary policy is tightened ever further so the chances of the UK avoiding slipping into a recession recede.”
Uncertainty prevails
Business groups said companies would continue to face economic headwinds, despite a certain optimism implicit in Wednesday's GDP figures.
“The combination of high inflation and rising debt service costs will constrain consumer cash-flow and dampen the housing market,” said Ben Jones, lead economist at the Confederation of British Industry.
“Businesses are feeling the pinch from tighter financial conditions and lending to firms has stagnated in recent months, especially to SMEs [small and medium enterprises].
“Although energy and digital transformations remain high on firms’ agendas, uncertainty over the wider economic outlook means businesses investment is likely to remain subdued in the near term.”
However, in terms of interest rates, the bounce-back in consumer-facing services may be a double-edged sword, according to Kitty Ussher, chief economist at the Institute of Directors.
“This suggests that households responded to the improving weather in April by raising their levels of discretionary spending – even in the face of rising costs,” she said.
“Businesses in the consumer-facing sectors will be encouraged by today's data.
“However, the Bank of England may interpret it as proof that their interest rate hikes have not yet dampened demand enough to reduce inflationary pressure, particularly when combined with yesterday's strong labour market performance.”
As higher interest rate expectations loom, analysts said the gloom surrounding the housing market could only deepen.
“Further rate rises will only dampen the housing market, as would-be home movers put their plans on hold and first-time buyers get priced out by affordability checks,” said Alice Haine, personal finance analyst at Bestinvest.
“With mortgage lending already dipping at the start of the year and saving levels in retreat as people raid their savings pots to pay bills and support regular household expenditure, the outlook for the economy remains uncertain.”
Overall head-to-head
Federer 6-1 Cilic
Head-to-head at Wimbledon
Federer 1-0 Cilic
Grand Slams titles
Federer 18-1 Cilic
Best Wimbledon performance
Federer: Winner (2003, 2004, 2005, 2006, 2007, 2009, 2012)
Cilic: Final (2017*)
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
UAE SQUAD
Goalkeepers: Ali Khaseif, Fahad Al Dhanhani, Mohammed Al Shamsi, Adel Al Hosani
Defenders: Bandar Al Ahbabi, Shaheen Abdulrahman, Walid Abbas, Mahmoud Khamis, Mohammed Barghash, Khalifa Al Hammadi, Hassan Al Mahrami, Yousef Jaber, Salem Rashid, Mohammed Al Attas, Alhassan Saleh
Midfielders: Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Majed Hassan, Yahya Nader, Ahmed Barman, Abdullah Hamad, Khalfan Mubarak, Khalil Al Hammadi, Tahnoun Al Zaabi, Harib Abdallah, Mohammed Jumah, Yahya Al Ghassani
Forwards: Fabio De Lima, Caio Canedo, Ali Saleh, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri
The bio
Favourite food: Japanese
Favourite car: Lamborghini
Favourite hobby: Football
Favourite quote: If your dreams don’t scare you, they are not big enough
Favourite country: UAE
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Indoor Cricket World Cup
Venue Insportz, Dubai, September 16-23
UAE squad Saqib Nazir (captain), Aaqib Malik, Fahad Al Hashmi, Isuru Umesh, Nadir Hussain, Sachin Talwar, Nashwan Nasir, Prashath Kumara, Ramveer Rai, Sameer Nayyak, Umar Shah, Vikrant Shetty
COMPANY%20PROFILE
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It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
Like a Fading Shadow
Antonio Muñoz Molina
Translated from the Spanish by Camilo A. Ramirez
Tuskar Rock Press (pp. 310)
OTHER IPL BOWLING RECORDS
Best bowling figures: 6-14 – Sohail Tanvir (for Rajasthan Royals against Chennai Super Kings in 2008)
Best average: 16.36 – Andrew Tye
Best economy rate: 6.53 – Sunil Narine
Best strike-rate: 12.83 – Andrew Tye
Best strike-rate in an innings: 1.50 – Suresh Raina (for Chennai Super Kings against Rajasthan Royals in 2011)
Most runs conceded in an innings: 70 – Basil Thampi (for Sunrisers Hyderabad against Royal Challengers Bangalore in 2018)
Most hat-tricks: 3 – Amit Mishra
Most dot-balls: 1,128 – Harbhajan Singh
Most maiden overs bowled: 14 – Praveen Kumar
Most four-wicket hauls: 6 – Sunil Narine
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
UAE currency: the story behind the money in your pockets
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Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
The biog
Name: Abeer Al Bah
Born: 1972
Husband: Emirati lawyer Salem Bin Sahoo, since 1992
Children: Soud, born 1993, lawyer; Obaid, born 1994, deceased; four other boys and one girl, three months old
Education: BA in Elementary Education, worked for five years in a Dubai school
Profile Box
Company/date started: 2015
Founder/CEO: Mohammed Toraif
Based: Manama, Bahrain
Sector: Sales, Technology, Conservation
Size: (employees/revenue) 4/ 5,000 downloads
Stage: 1 ($100,000)
Investors: Two first-round investors including, 500 Startups, Fawaz Al Gosaibi Holding (Saudi Arabia)
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
MATCH INFO
Europa League final
Who: Marseille v Atletico Madrid
Where: Parc OL, Lyon, France
When: Wednesday, 10.45pm kick off (UAE)
TV: BeIN Sports
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
MATCH INFO
Manchester United 2
(Martial 30', McTominay 90 6')
Manchester City 0
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
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