LONDON (Parliament Politics Magazine) – In April, the UK economy dropped once more as firms felt the effects of price increases and the NHS Covid Test and Trace system was shut down.
Official figures reveal that the economy declined by 0.3 percent in April after shrinking by 0.1 percent the month before.
All three major economic sectors – production, manufacturing, and service – shrank in April for the first time since January 2021.
And the latest statistic was the first in a row after Covid’s attack.
The economy performed worse than projected in April, with most economists expecting growth of 0.1 percent.
The Bank of England, however, has cautioned that the UK is experiencing a “sharp economic slowdown,” with prices rising at their quickest rate in 30 years, influenced by the ever-high fuel and energy costs.
By the year’s end, the Bank of England predicts that inflation – the rate at which prices rise – will have risen to more than 10%.
Countries around the world were facing sluggish development, and the UK was not exempt from those issues, Chancellor Rishi Sunak stated in response to the latest numbers.
He wanted to reassure people that they were completely focused on developing the economy in the long run to address rising costs of living, while also assisting families and businesses with the acute challenges they were experiencing, he said.
The main cause of April’s contraction, according to the Office for National Statistics (ONS), was the services sector’s winding down of the NHS’s Covid Test and Trace operation.
However, the UK’s statistics authority stated that firms were reporting “certain common themes” that were having a detrimental impact across several industries.
Many businesses claimed that rising fuel and diesel prices forced them to spend more for materials or “increase the price of the products they sold,” according to the research.
Other respondents also claimed that big rises in utility bills had harmed them, notably for gas and electricity, the ONS added.
Various enterprises reported price increases for other inputs such as steel, aluminium, animal feed, chemicals, fertiliser and cooking oil, while some respondents indicated they were having “difficulties” sourcing electronic components, kitchen appliances, machinery and automotive wire harnesses.