UK economy contracts in April amid energy price pressures in World Economy News 13/06/2026 Investing.com — The UK economy contracted 0.1% in April 2026, marking the first monthly decline since August 2025, according to ONS data released Friday. The dip follows a strong start to the year, GDP grew 0.7% in the three months to April, but analysts say a course correction was inevitable as the fallout from the Iran conflict begins to weigh on households and businesses. “After a super strong start to the year, some course correction was inevitable,” Deutsche Bank said in a note. “As the Iran conflict unfolds, it’s clear that the energy shock is starting to catch up with households and businesses.” Stay ahead of the FTSE — premium UK stock insights and real-time market movers with InvestingPro The contraction was driven primarily by a 0.2% fall in services output, which accounts for the bulk of UK economic activity. Eight of 14 services’ sub-sectors declined in the month. Arts and entertainment fell 4.3%, partly due to the cancellation of sporting events in the Middle East affecting UK-based businesses, while wholesale and retail dropped 0.4% as households pulled back on non-energy spending. Administrative services also fell sharply, down 2.2%. Consumer-facing services contracted 0.5% in April. Fuel consumption is down nearly 10%, and Deutsche Bank noted that warmer weather reduced energy demand in the production sector by 3.2% on the month. Industrial production was flat overall, though manufacturing grew 0.4%, boosted by pharmaceuticals and basic metals, gains the broker partly attributed to firms stockpiling inventories amid elevated geopolitical uncertainty. Construction was the sole bright spot, edging up 0.1%, led by repair and maintenance activity. Capital Economics expects the economy to stagnate in the second and third quarters as higher energy prices erode household real incomes. The broker does not expect the Bank of England to raise rates at its meeting next Th