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UK economy shrinks in April

12 June 202620 views0

Official figures released this week showed the UK economy contracted by 0.1% in April, the first monthly fall since August and a reversal after a run of stronger growth earlier in the year. The Office for National Statistics attributed much of the decline to the war in the Middle East, with the effective closure of the Strait of Hormuz driving up oil and fuel costs and denting turnover across manufacturing, wholesale, transport and travel. The steepest drag came from arts, entertainment and sport, where output fell sharply, partly reflecting the cancellation of events linked to the conflict.

The picture over a longer horizon was less bleak. Output over the three months to April was still 0.7% higher than the previous quarter, continuing a run of quarterly growth that began earlier in the year.

Chancellor Rachel Reeves acknowledged that the conflict would be felt domestically, while stressing the government’s efforts to shield households from external shocks. Economists were less reassured. KPMG’s chief economist described the contraction as evidence of renewed fragility in the UK economy, warning that households face higher energy costs against a backdrop of weak domestic demand. Attention now turns to the Bank of England, which meets next week and is widely expected to leave interest rates unchanged as it weighs rising inflation risks from energy prices against a softening growth outlook.

The underlying data was not contested across the press. The divergence was in framing. Left-leaning coverage centred the conflict, presenting the contraction primarily as fallout from the war and emphasising Reeves’s acknowledgement of the hit. Centrist outlets led with the headline figure and the ONS’s own explanation, while still reaching for dramatic language to describe the fall. Right-leaning coverage emphasised the contraction itself but tempered it by pointing to the stronger quarterly growth figure, framing the overall picture as less alarming.