UK GDP fell 0.3% month-on-month in April, following a 0.2% rise in March, versus market expectations of -0.1%.
Services output fell 0.4% month-on-month, construction output grew by 0.9% month-on-month and production output fell 0.6% month-on-month.
Nicholas Hyett, Investment Manager at Wealth Club said, “The UK economy is facing a cocktail of headwinds to growth and slowed more than expected in April as a result.
“In the very short term the change to Stamp Duty rules have put the legal and property services on ice – with legal activities down 10.2% month-on-month. New barriers to trade with the US and changes to employment costs, from a higher living wage and increased national insurance contributions, are a longer-term challenge.
“It looks like work was pulled forward to earlier in the year to avoid those headwinds and as a result we’re now seeing the inevitable economic hangover.
“It’s not the look the Chancellor would have liked for the media rounds after her big spending review announcement. Not only has the government consistently emphasised economic growth as a priority, but a shrinking economy will struggle to deliver the tax revenues the Chancellor needs to make the big spending commitments she outlined yesterday.
“The Chancellor will hope that the infrastructure binge that seems to be supporting the construction sector provides a little extra fuel to get the economy through this lull.
