UK economy flatlines in April as construction output dives

Source: CNBC
Author: Jenni Reid

LONDON -- U.K. economic growth ground to a halt in April, according to flash figures published on Wednesday, stalling the muted rebound from last year's recession.

Economists polled by Reuters had expected growth to flatten, after the economy expanded by 0.4% in March.

Construction output declined 1.4% in its third straight fall.

The U.K. eked out moderate growth in the first three months of the year, leading to an exit from a shallow recession for the first quarter as a whole.

The quarterly growth reported last month had fueled bets on the Bank of England beginning interest rate cuts in June, but market expectations have shifted significantly since then.

The Bank of England meets to decide the next steps of its monetary policy on June 20. Traders see little chance of a rate cut announcement this month, instead looking toward August or September.

Mixed labor data released on Tuesday showed U.K. unemployment unexpectedly rose to its highest level in two and a half years, while wage growth came in at a higher-than-expected at 6%.