The fall of 0.3% in April, following a 0.2% decrease in March, highlights the increasing stress the UK economy is under. All main sectors have seen a fall in growth, the first time since January 2021.
Commenting on the latest ONS UK GDP figures published this week, Babs Murphy, chief executive of the North & Western Lancashire Chamber of Commerce said:
“This weakening is the predictable outcome of surging inflation, supply chain disruption and widespread skills shortages.
“Businesses from all sectors are facing astonishing rises in raw material costs, soaring energy bills, and wage pressures. The introduction of an increase to employer National Insurance Contributions in April has only further added to firms’ problems.
“This declining output comes off the back of two years of significant damage suffered by small businesses, whose deteriorated cash positions mean that they are in a far worse position to stomach further pressure. The global aspects to all these problems mean they are likely to weigh heavily on the UK’s prospects for growth for the near future.
“Declining business investment remains a serious cause for concern and urgent Government action is needed to combat this. Cutting VAT on businesses’ energy bills to 5% would ease the squeeze on firms’ cashflow and give them some room for manoeuvre.”
