The UK economy contracted in April for the first time since August last year, as the impact of the Iran conflict began to weigh on growth, with disruptions to major sporting and entertainment events hitting businesses across Britain.
The economy shrank by 0.1% in April, according to data from the Office for National Statistics (ONS), marking one of the first clear signs that the geopolitical crisis is affecting UK economic activity.
The decline was largely driven by weakness in the services sector, which remains the backbone of the British economy.
ONS data showed that services output fell 0.2% in April, affected by weaker performance in administrative services, support activities, arts and entertainment.
Officials said reports indicated that cancellations of major sporting events in the Middle East had a direct impact on UK companies linked to those industries.
The escalation of the conflict led to the cancellation of Formula 1 races in Bahrain and Saudi Arabia, which had been scheduled for April, along with other tennis and football events.
The disruption created financial pressure for British businesses involved in event management, broadcasting, travel and related services.
The cancellations highlighted the broader economic impact of geopolitical instability, with international events and tourism-related sectors facing increasing uncertainty.
While services weakened, Britain’s manufacturing sector offered partial support, with output rising 0.4% in April.
The increase was mainly supported by stronger pharmaceutical production, a sector known for significant monthly fluctuations.
Despite the monthly contraction, the UK economy expanded by 0.7% in the three months ending April compared with the previous three-month period, in line with economists’ expectations.
However, analysts warned that continued geopolitical tensions could create additional challenges for Britain’s growth outlook by affecting consumer confidence, energy costs and global demand.
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