Britain's opposition Labour Party leader Keir Starmer and Shadow Chancellor of the Exchequer Rachel Reeves. /Maja Smiejkowska/Reuters
Where is the British economy going?
With just weeks to go until a general election it's a question that's puzzling politicians and fiscal policymakers, as official statistics show the country falling back to zero growth in April.
The ruling Conservatives, trailing heavily in the polls, were pinning their hopes on an economic bounce after January, February and March saw the best GDP numbers in two years. But then came the rain - just in time for the Easter holidays - and people stayed at home.
The April downpours washed out retail sales, dampened manufacturing by 0.9 percent, and made for some soggy construction sites, shrinking the sector by 1.4 percent. That was counterbalanced by small but steady growth across the services sector (up 0.2 percent), including a rapid expansion in information and technology industries.
Erratic could be the word. However, the April stagnation was widely foreseen by economists who apparently keep a sharp eye on the weather.
Britain's Prime Minister and Conservative Party leader Rishi Sunak in Silverstone, on Tuesday. /Benjamin Cremel/Pool via Reuters
Expected or not, this economic data comes just 24 hours after labor statistics showed unemployment rising to 4.4 percent, the highest in nearly three years. Opposition parties have been quick to seize on the numbers as election campaign capital.
"Rishi Sunak claims we have turned a corner, but the economy has stalled and there is no growth," said Labour's Rachel Reeves, who's aiming to become the UK's next finance minister.
Most opinion polls give the Labour Party upwards of a 20-point lead over the Prime Minister Sunak's governing Conservatives. At the time of writing, the government is yet to comment on the April data but will likely frame it as a weather-driven anomaly. And the Conservatives can still claim a continued, if stuttering economic recovery, highlighting the 0.7 percent bounce in the first quarter as a sign that its policies are working.
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Economists generally agree about the weather-impact on the April flatlining and most believe there won't be a return to recession, like the one at the end of last year.
"Overall, despite the stalling of the recovery in April, the dual drags on economic growth from higher interest rates and higher inflation will continue to fade throughout the year," according to Paul Dales, chief economist at Capital Economics. "That will generate a bit of an economic tailwind for the next government."
A tourist shelters from the rain under an Union Jack umbrella near the Bank of England in February. /Isabel Infantes/ReutersFile
Meanwhile, the UK's central bank, The Bank of England, is expected to start cutting interest rates from their 16-year high of 5.25 percent later this year. But just like the politicians on the campaign trail, its analysts will be poring over the numbers, trying to figure out ultimately what direction the economy is heading in.
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