The UK economy has shrunk for the second month in a row in April prompting further recession fears.
Gross domestic product (GDP), a measure of the size of the economy, fell by 0.3% in April - the latest figures from the Office for National Statistics (ONS) revealed.
While experts had been expecting growth of 0.1% in April, the month-on-month drop in GDP was the biggest contraction since January 2021 and follows a fall of 0.1% in March.
The ONS said it marked the first time GDP has fallen for two months in a row since March and April 2020, when the pandemic first hit and sent the economy tumbling.
Economists believe a technical recession – as defined by two successive quarters of falling GDP – could still be avoided, but there is no doubt that the economic outlook has worsened in recent months.
It comes as the cost-of-living crisis has created a huge setback in the recovery of the economy from the pandemic.
Economists believe a technical recession – as defined by two successive quarters of falling GDP – may yet be avoided, but there is no doubt that the economic outlook has worsened in recent months.
Petrol costs have hit new records, with the average cost of filling a typical family car with petrol rising past £100 for the first time last week.
The Bank of England is expected to raise interest rates for the fifth time in a row on Thursday, from 1% to 1.25%, to try to rein in rampant inflation.
Samuel Tombs, of Pantheon Macroeconomics, is forecasting the economy to contract overall between April and June as the cost-of-living crisis hits hard, but still believes the UK will dodge a full-blown recession.
He said: “A recession – two quarters of negative growth – remains unlikely.
“Households’ real disposable incomes should rise in both the third and fourth quarters now that the Chancellor has announced an extra £15 billion in grants during these quarters, equal to nearly 2% of their likely income.”
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