UK economy shrank by 0.1% in April following impact of Iran war

The UK economy contracted for the first time in eight months amid signs that the Iran war is starting to take its toll on some sectors.

The Office for National Statistics (ONS) said gross domestic product (GDP) fell 0.1 per cent in April, a sharp decline from growth of 0.3 per cent in March and 0.4 per cent in February.

The decrease was due to a 0.2 percent decrease in services; this decline was partially offset by a 0.1 percent increase in construction and a 0.4 percent growth in manufacturing.

GDP rose by 0.7 per cent in the three months to April, according to the ONS.

Liz McKeown, ONS director of economic statistics, said: “The economy has grown overall in the last three months, reflecting strong growth in February and March.

“This was despite April showing a small decline.”

Chancellor of the Exchequer Rachel Reeves admitted war in the Middle East was hitting the economy.

“Before the conflict in the Middle East, growth was higher than expected and inflation was falling. This is not a war we want or participate in, but a war that will have an impact internally as well.

“Our economic plan is correct; both the IMF and the OECD have been raising their growth forecasts recently.

“The choices I have made as chancellor mean that our economy is in a stronger position to cope with the costs of war and that we continue the work of building a stronger and safer economy.”