UK economy shrinks for second month running

The UK economy ccontracted by 0.3% in April, after shrinking by 0.1% in March, according to new figures from the Office for National Statistics (ONS).

It’s the first time since the start of the pandemic that the economy has contracted for two months in a row.

Soaring inflation is hitting households and businesses, with prices rising at the fastest rate for 30 years due to record-high fuel and energy costs.

The ONS said that all main sectors of the economy contributed to April’s decline but the depth of the contraction was due to a big drop in the health sector after the winding down of the test and trace scheme.

The data is line with with warnings from the Bank of England that the UK faces a “sharp economic slowdown”, with inflation climbing to more than 10% by the end of the year.

Some analysts have warned that the UK risks falling into a recession — defined as the economy contracting for two consecutive three-month periods.

With less than 40 days until parliament goes into recess, business group the CBI has urged the UK goverment to take “vital actions” to boost business confidence and alleviate labour and skills shortages.

“Inaction this summer would set in stone a stagnant economy in 2023, with recession a very live concern,” said CBI director-general Tony Danker.