The UK economy shrank by 0.1% in April, according to official figures published on Friday, as the ongoing Iran conflict continues to weigh on output.
A 0.2% contraction in services activity was identified as the primary driver of the decline, with the figure partly offset by a 0.1% rise in construction output.
Production output recorded zero growth for the month, adding little relief to an already sluggish economic picture across the country.
The result was in line with expectations, as economists polled by Reuters had forecast a 0.1% month-on-month contraction for April.
April’s figures mark a notable slowdown following a period of modest gains, with growth of 0.3% in March, 0.4% in February, and no growth recorded in January.
One of the most significant contributors to the services decline was a 9.1% fall in sports, amusement and recreation activities, representing a sharp drop in that sector.
The Office for National Statistics said this was the largest negative contribution from a single industry to both services output and real GDP growth during the period.
The ONS noted that cancellations of various sporting events in the Middle East had directly affected the output of UK-based companies operating in that space.
Businesses in manufacturing, wholesale, transportation support, and travel agencies also reported that the Middle East conflict had contributed to reduced turnover throughout April.
“A common theme of the comments received was the increase in prices because of the Middle East conflict,” the ONS said, highlighting the breadth of the disruption across industries.
The ONS added that these comments were “mainly for energy and fuel costs, with some suggesting an impact seen in April 2026 and also suggesting an impact for future months.”
The figures paint a challenging picture for the UK economy, with external geopolitical pressures translating into tangible domestic costs for businesses and consumers alike.
Policymakers will be watching closely in the coming months to assess whether the conflict’s economic effects prove temporary or develop into a more sustained drag on growth.