Economic activity falls at sharpest pace since October 2023 in April

GDP reading: GDP decreased 0.3% in month-on-month seasonally adjusted terms in April, which contrasted March's 0.2% increase and undershot market expectations of a softer decline. The figure marked the worst reading since October 2023. That said, the UK’s GDP data is frequently choppy from month to month, meaning that the April reading should not be overinterpreted. On a rolling quarterly basis, GDP increased 0.7% in February–April, matching January–March’s expansion.

Drivers: Services and industrial output both fell in April from March, more than outweighing higher construction output.

Panelist insight: On the latest data, ING’s James Smith said: “The figures have been enormously volatile recently. That’s partly because of frontloading activity ahead of tariffs. Manufacturing surged in February and has unwound since. But there is also a curious trend emerging, where the GDP figures show the first half of the year – and in particular the first quarter – as stronger than the second. This has happened every year since 2022 and hints that there is an issue with the way the data is being seasonally adjusted.”

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