UK economy stages modest rebound in April: data

The UK economy returned to modest growth in April on strong consumer spending, official data showed Wednesday, stoking hopes it will avoid recession despite high inflation and rising interest rates.

Gross domestic product increased by 0.2 percent in April following a fall of 0.3 percent in March, the Office for National Statistics said in a statement.

Activity was boosted by consumer expenditure on shopping and hospitality, while the reading was in line with market expectations.

“GDP bounced back after a weak March,” said ONS director of economic statistics Darren Morgan.

“Bars and pubs had a comparatively strong April, while car sales rebounded and education partially recovered from the effect of the previous month’s strikes.”

The British economy was 0.3 percent larger than its pre-pandemic level.

Finance minister Jeremy Hunt welcomed the upbeat data but cautioned over the outlook.

“We are growing the economy,” Hunt said in response.

“But high growth needs low inflation,” he added.

UK annual inflation slowed to a 13-month low in April, but remains elevated at 8.7 percent as soaring food prices offset weaker energy costs. Official data for May is due next week.

The Bank of England last month lifted its key interest rate to 4.50 percent, its 12th increase in a row, and is widely expected to hike again next week in a bid to tame stubbornly high consumer prices.

“Persistent inflation and higher interest rates continue to constrain the UK economy, yet April marked a welcome return to growth,” said Jack Sirett, partner at global financial services firm Ebury.

“The likelihood of recession continues to fade,” he added.