UK economy returns to growth

The UK economy returned to growth in April driven by expansion in the services sector, according to official data.

Gross domestic product grew by 0.2 per cent between March and April, reversing some of the contraction of the previous month, according to data published by the Office for National Statistics on Wednesday.

The figure was in line with analysts’ expectations and was driven by the services sector, which expanded 0.3 per cent. Output in consumer-facing services, such as stores and restaurants, grew by 1 per cent in April, following a fall of 0.8 per cent in the previous month.

However, manufacturing and construction both contracted.

Output grew just 0.1 per cent in three months to April compared with the previous three months, reflecting the impact of high inflation on household finances and business activity.

Coupled with strong labour market data published on Tuesday, April GDP’s figures support market expectations that the Bank of England will raise interest rates again at its next meeting on June 22 to bring inflation down to its 2 per cent target.