UK economy stagnates mere weeks before July 4 elections
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Data on inflation is due to be published next week during a regular Bank of England meeting.
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Britain's Prime Minister and Conservative Party leader Rishi Sunak speaks with students during a visit of University Technical College (UTC) in Silverstone, England, Tuesday, June 11, 2024. (AP)
Official data in the UK showed the economy stagnating last month, right before the country's general election in a few weeks on July 4; March only witnessed an expansion of 0.4%, according to the Office for National Statistics.
Paul Dales, the chief UK economist at Capital Economics research group, explained, "The stagnation in GDP in April doesn't mean the economic recovery has been extinguished, but it's hardly great news for the prime minister three weeks ahead of the election".
April's output data showed services only increased by 0.2%, production decreased by 0.9% as did construction by 1.4%.
Prime Minister Rishi Sunak vowed on Tuesday tax cuts to voters and lower immigration after launching his party's campaign against the Labour Party's Keir Starmer.
🇬🇧 BREAKING! UK Prime Minister Rishi Sunak Calls Surprise July 4 Election
— DD Geopolitics (@DD_Geopolitics) May 22, 2024
Rishi Sunak announced that he has received King Charles III's approval to dissolve Parliament and hold early elections. pic.twitter.com/2BfEpdK3St
He added that his government would pay for lower taxes by diminishing welfare payments to working-age recipients, even though official data recently showed a jump in UK unemployment.
In addition, data on inflation is due to be published next week during a regular Bank of England meeting when it is expected to keep its main interest rate at a 16-year high.
Read more: UK's Sunak to add compulsory military service if Conservatives win
Weakest economy in Western Europe
The UK is ranked as the weakest economy among Western European countries and is forecasted to remain so due to high interest rates and the lasting impacts of last year's inflation surge.
Earlier last month, the OECD said that the UK will plunge to the bottom of G7 economic growth rates in 2025 with a growth of 1%, directly behind Germany at 1.1%.
Meanwhile, the US and Canada will top the chart as the fastest-growing member economies at 1.8% for both.
The Paris-based institution stated that the UK's economic growth would be hindered by ongoing price increases in the services sector and a shortage of skilled workers, which will delay anticipated reductions in interest rates.
The think tank expects that the Bank of England will postpone the initial interest rate cut from 5.25% until the autumn of next year, citing concerns that price growth may rebound.
