NEW DELHI: Britain votes on July 4 in an widely expected to be won by the main opposition Labour party, a victory that would end 14 years of rule by the Conservatives, currently led by Prime Minister Rishi Sunak.
The election comes amid economic concerns, as the UK economy stagnated in April after emerging from a short-lived recession in the first quarter of the year, according to official data released Wednesday by the Office for National Statistics (ONS).The data showed zero growth in April, following a modest expansion of 0.4 percent in March.
Economic indicators ahead of the election reveal mixed performance across sectors. While the services sector experienced a slight growth of 0.2 percent, production and construction sectors saw declines of 0.9 percent and 1.4 percent respectively.
“The stagnation in GDP in April doesn’t mean the economic recovery has been extinguished, but it’s hardly great news for the prime minister three weeks ahead of the election,” commented Paul Dales, chief UK economist at Capital Economics.
Britain’s economy had previously contracted for two consecutive quarters in the latter half of 2023, technically entering a recession due to persistent inflation which has exacerbated the cost-of-living crisis. The first quarter of 2024 saw the economy return to growth, albeit modestly.
In response to the challenging economic conditions, Prime Minister Sunak has pledged to cut taxes and reduce immigration as part of his campaign promises, aiming to close the polling gap on Labour leader Keir Starmer. Sunak stated that his government plans to finance the tax cuts by tightening welfare payments to working-age recipients.
Economic challenges are compounded by rising unemployment, which was revealed in official data on Tuesday, alongside increasing wage growth. The Bank of England is also expected to maintain its main interest rate at a 16-year high during its regular meeting next week, as new inflation data is anticipated.
(With agency inputs)
The election comes amid economic concerns, as the UK economy stagnated in April after emerging from a short-lived recession in the first quarter of the year, according to official data released Wednesday by the Office for National Statistics (ONS).The data showed zero growth in April, following a modest expansion of 0.4 percent in March.
Economic indicators ahead of the election reveal mixed performance across sectors. While the services sector experienced a slight growth of 0.2 percent, production and construction sectors saw declines of 0.9 percent and 1.4 percent respectively.
“The stagnation in GDP in April doesn’t mean the economic recovery has been extinguished, but it’s hardly great news for the prime minister three weeks ahead of the election,” commented Paul Dales, chief UK economist at Capital Economics.
Britain’s economy had previously contracted for two consecutive quarters in the latter half of 2023, technically entering a recession due to persistent inflation which has exacerbated the cost-of-living crisis. The first quarter of 2024 saw the economy return to growth, albeit modestly.
In response to the challenging economic conditions, Prime Minister Sunak has pledged to cut taxes and reduce immigration as part of his campaign promises, aiming to close the polling gap on Labour leader Keir Starmer. Sunak stated that his government plans to finance the tax cuts by tightening welfare payments to working-age recipients.
Economic challenges are compounded by rising unemployment, which was revealed in official data on Tuesday, alongside increasing wage growth. The Bank of England is also expected to maintain its main interest rate at a 16-year high during its regular meeting next week, as new inflation data is anticipated.
(With agency inputs)