UK – no growth and cooling jobs market, but no change for rates

The UK’s economic growth from the first quarter evaporated in April as the size of the UK economy was unchanged. Growth in the services sector slowed but it was still enough to offset a drop in construction activity. The slowdown is noticeable after the relatively strong growth seen in the first quarter. There is more evidence that higher rates are having an effect on the UK’s jobs market. The unemployment rate continued rise as it ticked up again last month to stand at 4.4%. This is a steady increase from the rate of 4% in January. Average wages are still rising faster than inflation but there are other signs of hiring slowing down as the number of job vacancies has continued to decline.

The lack of growth and worsening job market means the Bank of England is still expected to cut rates this year but the timing of rate cuts is expected to be unchanged and this helped UK government bonds rise without the volatility seen in US and European markets, and the pound to appreciate against the euro.

For the following stories, please click on this link*

  • Europe: Success of far-right parties in European Elections rattles equity and bond markets
  • Rates: Federal reserve holds and signals one cut likely this year
  • Europe: Markets unsettled by snap election in France

(*Please note, The contents of this e-shot been prepared for general information only. It does not contain all of the information which an investor may require in order to make an investment decision. If you are unsure whether this is a suitable investment you should speak to your financial adviser. This information is not guaranteed to be correct, complete, or accurate. FE Research is a division of Financial Express Investments Ltd, registration number 03110696, which is authorised and regulated by the Financial Conduct Authority (FRN 209967). For our full disclaimer please visit www.financialexpress.net/uk/disclaimer. (Data sourced from Yahoo Finance, Investing.com and Office for National Statistics)

 

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