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| UK economy grows but house market begins to weaken | |
| (32 minutes later) | |
| The UK economy grew marginally in April helped by strong trade in bars and pubs but housebuilders and estate agents had a "poor month", official figures show. | |
| The economy grew by 0.2% in April after shrinking in March, the Office for National Statistics (ONS) said. | |
| But the ONS said the construction sector had faltered as rising interest rates and mortgage costs made house buyers more cautious. | |
| One housebuilder told the BBC people were "holding back" on buying homes. | |
| The Bank of England has been raising interest rates to calm the rate at which prices are rising - which is known as inflation and currently stands at 8.7%. | |
| As interest rates have risen and more people are coming to the end of fixed-rate mortgage deals, some lenders have been withdrawing certain mortgages from the market. | |
| Ian Burns, who runs Cameron Homes in Staffordshire, said people are being "very cautious" and are "taking longer to make decisions". | |
| He said: "Over the past three or four weeks, we've seen a slowdown in reservations and ultimately, if that doesn't pick up, then we have to slow down the build operation. | |
| "We can't just continue to build houses if we don't have customers for them." | |
| The Bank of England is widely expected to lift interest rates again when its Monetary Policy Committee meets next week. It had been predicted to increase borrowing costs from 4.5% to 4.75%. | |
| However, following stronger than expected wage growth in the three months to April - which, it is feared, will keep inflation higher for longer - the Bank is now predicted to raise interest rates to 5%. | |
| Chancellor Jeremy Hunt said welcomed Wednesday's figures from the ONS but warned that the UK needed to tackle inflation to "protect family budgets". | |
| For the three months to April, the economy grew by 0.1%. | |
| Related Topics | Related Topics |
| GDP | GDP |
| Economic growth | Economic growth |
| UK economy | UK economy |
| Office for National Statistics | Office for National Statistics |