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| UK economy grows in April but house market weakens | 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. | 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". | 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. | "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". | 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%. | 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. | With rates rising, lenders have been withdrawing some mortgage products with hardly any notice. |
| Five reasons why mortgages are getting us down | Five reasons why mortgages are getting us down |
| For the three months to April, the UK economy grew only marginally by 0.1%. | |
| Yael Selfin, chief economist at accountancy firm KPMG UK. said "major challenges" remained for the UK economy. | |
| She added it was likely the Bank of England would continue its rate hiking cycle "putting further pressure on both households and businesses as they face higher borrowing costs". | |
| Chancellor Jeremy Hunt said the UK still had a "big issue" with rising prices, stating inflation was "the number one challenge we face". | |
| In response to whether he was following the dictum of John Major, who as Chancellor in 1989 said "if it isn't hurting, it isn't working", Mr Hunt said: "In the end there is no alternative to bringing down inflation, if we want to see consumers spending, if we want to see businesses investing, if we want to see long-term growth and prosperity. | |
| "And that's why we'll be unstinting in our support for the Bank of England as they go about their job to bring down inflation." | |
| Labour's Shadow Chancellor Rachel Reeves said the figures represented "another day in the dismal low growth record book of this Conservative government". | 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." | "The facts remain that families are feeling worse off, facing a soaring Tory mortgage penalty and we're lagging behind on the global stage." |
| Related Topics | Related Topics |
| GDP | GDP |
| Economic growth | Economic growth |
| UK economy | UK economy |
| Office for National Statistics | Office for National Statistics |