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"Today’s GDP data showing that growth flatlined in April is another devastating blow to the Tories' re-election hopes"

ended 12. June 2024

Data published by the Office for National Statistics this morning showed that monthly real gross domestic product (GDP) is estimated to have shown no growth in April 2024, following growth of 0.4% in March 2024. Other key points, below. Newspage asked experts how this could impact next week's rate decision and what it means for the General Election, bottom.

  • Services output grew by 0.2% in April 2024, its fourth consecutive monthly growth, and also grew by 0.9% in the three months to April 2024.
  • Production output fell by 0.9% in April 2024 following growth of 0.2% in March 2024, but grew by 0.7% in the three months to April 2024.
  • Construction output fell by 1.4% in April 2024, its third consecutive monthly fall, and fell by 2.2% in the three months to April 2024. At the sector level, the main contributors to the monthly decrease were private housing new work, which fell by 4.4% in April 2024, and private housing repair and maintenance, which decreased by 2.5% in the month.

 

10 responses from the Newspage community

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Andrew Montlake
Managing Director at Coreco
If the Prime Minister thinks this data shows his mythical “plan” is working then it is hard to believe anything else he says in the run up to election day. A flatlining economy leaves the Government with the faintest of pulses, whilst the fall in construction begs the question as to whether they would ever get close to their new house building pledge when they have consistently failed to hit the old one. The only bright spot is that these figures may give the Bank of England more confidence to start cutting interest rates, although this will not come soon enough to save the sinking Conservative ship.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Construction output being down at the same time that all the political parties are telling us they plan to build masses of new houses will certainly raise questions as to how they plan to deliver such goals. The hard data published today around housing exposes political hyperbole and promises. The UK economy continues to flatline with the need for a base rate reduction or new government stimulus to resurrect it.
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Rohit Kohli
Director at The Mortgage Stop
Today’s GDP data showing that growth flatlined in April is another devastating blow to the Tories' re-election hopes. Most concerning is the drop in construction output, which must sound alarm bells at the Bank of England that the economy is crying out for that first rate cut. Builders need confidence to break ground and with rates at their current level, that confidence simply isn't there.
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Justin Moy
Managing Director at EHF Mortgages
With the promise of thousands of new properties from most parties in this General Election, it's ironic that housing constuction went into serious decline in April. The lack of growth is at least a good thing for mortgage rates, as cutting the base rate is the preferred and conventional way to stimulate the economy. This underwhelming data will add to the debate the MPC will have at the next meeting. A June cut is not off the cards.
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Riz Malik
Independent Financial Adviser at R3 Wealth
No growth sums up the legacy of the current administration whose leader's greatest hardship was growing up without Sky. However, this could be good news with a Bank of England base rate meeting on the horizon. June still could see the first rate cut since 2020.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
The latest economic data shows the UK economy flatlined in April, much like the Conservatives' chances in the upcoming election. It seems the only thing growing right now is doubt about the Conservatives' future. While services managed a meagre 0.2% growth, production and construction took a nosedive, with construction down 1.4%. Clearly, the awful weather will once again be blamed. Private housing new work and maintenance saw even steeper declines, perfect timing for an election campaign.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Although total GDP output was flat, the engines of growth both show falls year to date in the most recent quarter with construction and production negative. The day after the Prime Minister unleashes his manifesto at Silverstone, he will know that without the throttles of industry open he’s got no other controls to spend on his lavish commitments unveiled yesterday. This could be good news for mortgage holders, as a weaker economy make it more likely the central bank will cut rates at its next meeting to keep inflation above its target.
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Ben Perks
Managing Director at Orchard Financial Advisers
This flat data is no surprise and, oddly, it’s not all bad. If the Monetary Policy Committee are paying attention, the pressure to reduce this month should be becoming insurmountable. Every data release and report we’ve seen over the last month has pointed towards a reduction. If they continue to ignore this, it will be to all our peril.
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Harps Garcha
Director at Brooklyns Financial
The Monetary Policy Committee (MPC) must consider these figures and act swiftly to stimulate the market and support struggling industries. These disappointing GDP figures reveal a downward trend in key sectors, underscoring the urgent need for a base rate reduction. Despite punchy wage growth figures yesterday, economic uncertainty and higher mortgage rates are slowing down house construction as demand wanes and households potentially put their home improvement aspirations on hold due to budget pressures.
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Sam Kirk
Managing Director at J-Flex Rubber Products
We've heard a lot about "sticking to the plan" lately, but the reality is that the plan is all very short-term and reactionary. Until those in power take a proactive approach and set a long-term strategy for investment and infrastructure spend, the economy will continue to underperform.