The UK economy contracted in April, marking its first monthly decline since last August. Official figures show that gross domestic product fell by 0.1 percent during the month. The dip has been linked to the impact of the war involving Iran, which has begun to weigh on the British economy.
One of the main factors behind the fall was the rise in fuel costs. Soaring petrol and diesel prices dragged down retail sales over the month. Higher prices at the pump left consumers with less to spend elsewhere, feeding through into weaker activity across the retail sector.
The services sector was also affected during April. Among the factors cited was the cancellation of sporting events in the Middle East, which weighed on parts of the sector. The combination of pressures across services and retail helped push overall output lower for the month.
The figures came alongside other signs of strain in the public finances. Government borrowing in April came in above the forecast set out by the Office for Budget Responsibility. The amount borrowed during the month stood at more than 24 billion pounds.
The labour market also showed weakness during the period. There were significant job losses recorded in the month of April. In addition, the figures pointed to notable job losses compared with the same period a year earlier.
Despite the monthly decline, the picture over a longer horizon is less negative. Measured on an annual basis, the economy is estimated to be up around 1.2 percent. The monthly fall therefore sits against a backdrop of modest year-on-year growth.
Even so, the underlying challenges facing the economy have not gone away. Output has been trending along with very little to no growth overall for several months. Coming at the start of the Chancellor's new fiscal year in April, the slight decline marks a difficult opening to the period.