UK ECONOMY SHRANK IN APRIL 

The UK economy shrank by 0.3 per cent in April figures published by the Office for National Statistics show, with rising prices and supply chain issues hitting businesses and consumers (Financial Times). It follows a contraction of 0.1 per cent the month before. April was the first time that all main sectors of the economy - services, manufacturing and production - had shrunk since January 2021 (BBC News). Economists polled by Reuters had expected growth of 0.1 per cent in April.

Meanwhile, the Confederation of British Industry has called on the government to take “vital actions” to avoid a recession after it had downgraded its growth forecasts for the UK (Sky News). 

LEGISLATION SCRAPPING PARTS OF THE NI PROTOCOL TO BE PUBLISHED

The government is set to publish legislation today that will scrap parts of the Northern Ireland protocol (Reuters). The protocol effectively keeps Northern Ireland within the European Union’s single market for goods and the customs union.

The move is likely to cause tension with the EU, but yesterday the Northern Ireland secretary Brandon Lewis said that the legislation would comply with international law (BBC News). It is expected that the legislation will create a dual regulatory regime that would allow businesses in Northern Ireland to choose between either EU or UK standards, alongside UK state aid rules applying in Northern Ireland.

NEWS IN BRIEF

There was a continuation of the gradual return to normal lending trends across SMEs during the first quarter of 2022, according to UK Finance’s Business Finance Review for Q1 2022. The quarter saw a modest uptick in demand for cashflow finance through overdrafts and invoice finance and asset-based lending. This is a consequence of both the end of Covid-19 restrictions and the significant increase in cost pressures that many businesses are now facing.

France has narrowed the gap to the UK in terms of European countries attracting overseas investment in financial services, according to a report by EY (Reuters).  

The business secretary Kwasi Kwarteng has written to the Competition and Markets Authority asking it to review petrol station operators following concerns that a recent 5p cut in fuel duty has not been passed on to consumers (The Guardian).

The price of Bitcoin has fallen to an 18-month low of just below $25,000 (Bloomberg)