UK economy shrinks by 0.3 per cent

The Government must create conditions for businesses to invest and grown after the UK economy contracted by 0.3 per cent, business leaders said today.

The Office for National Statistics (ONS) had been expected by economists to confirm a slight rise in gross domestic product (GDP) for April of 0.1 per cent following a small decline in the previous month.

April was the first time all main sectors of the economy - services, manufacturing and production - had shrunk since January 2021.

Prices are rising at their fastest rate for 30 years, driven by record-high fuel and energy costs.

Raj Kandola (pictured), head of policy at the GBCC, said: “As the cost of doing business continues to bite, it was no surprise to see a fall in economic activity in April.

“Rising levels of inflation, global supply chain disruption and soaring energy prices all contributed to a combined drop in output across the service sector, industrial production and construction - the first time that 's happened since the start of last year as the country was in the midst of a national lockdown.

“Early analysis from our latest Quarterly Business Report reveals that domestic sales for local businesses have remained strong, however many are still suffering from reduced levels of cash flow and remain under severe pressure to raise their prices.

“Within this context, it 's essential the Government uses the Autumn Statement to provide businesses with the platform they need to invest and grow - reversing the recent NI rises and cutting VAT on energy bills would be a step in the right direction. ”

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