UK economy contracts for first time since last August

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “UK GDP data added a softer tone beneath the market rally, with the economy shrinking 0.1 per cent in April and showing the first real signs that the strong start to the year is beginning to crack.

“Services took most of the strain, with households cutting back on non-energy spending and activity falling across more than half of the major sub-sectors, while the boost from stockpiling in manufacturing looks unlikely to last.

“The figures leave the economy on course for a much weaker second quarter, and while inflation risks have not disappeared, the loss of momentum makes it easier to argue that the Bank of England will keep rates on hold.”