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| UK economy grows in April but house market weakens | |
| (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 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. | 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. | 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. | 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%. | 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. | 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. |
| First-time buyers are being met with higher rates, leaving some priced out, and renters are also facing higher costs due to landlords selling up. | |
| Ian Burns, who runs Cameron Homes in Staffordshire, said people were being "very cautious" and were "taking longer to make decisions". | |
| "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," he told BBC Wake up to Money. | |
| "We can't just continue to build houses if we don't have customers for them." | "We can't just continue to build houses if we don't have customers for them." |
| Guy Gittins, chief executive of Foxtons estate agents in London, said the "power balance" between buyers and sellers had "shifted". He said this meant "serious sellers had to get a little bit more competitive with pricing". | |
| 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%. | 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's benchmark rate now expected to peak at 5.5%. | |
| With rates rising, lenders have been withdrawing some mortgage products with hardly any notice. | |
| Five reasons why mortgages are getting us down | |
| Chancellor Jeremy Hunt welcomed Wednesday's figures from the ONS but warned that the UK needed to tackle inflation to "protect family budgets". | |
| Labour's Shadow Chancellor Rachel Reeves said the figures represented "another day in the dismal low growth record book of this Conservative government". | |
| "The facts remain that families are feeling worse off, facing a soaring Tory mortgage penalty and we're lagging behind on the global stage." | |
| For the three months to April, the economy grew by 0.1%. | 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 |