IoD – Household spending drives stronger economy in April

Commenting on ONS data that showed monthly GDP growing by 0.2% in April 2023, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“April’s GDP data shows a recovery in consumer-facing services compared to March, with growth recorded in retail and wholesale trade, accommodation, food and beverage services, and transport.

“This suggests that households responded to the improving weather in April by raising their levels of discretionary spending – even in the face of rising costs.

“Businesses in the consumer-facing sectors will be encouraged by today’s data. However, the Bank of England may interpret it as proof that their interest rate hikes have not yet dampened demand enough to reduce inflationary pressure, particularly when combined with yesterday’s strong labour market performance.”