The UK economy contracted by 0.1% in April, according to figures released today by the Office for National Statistics (ONS).
The latest data adds to concerns over business confidence as companies continue to contend with uncertainty and rising costs.
Emeritus Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm, said: "After a promising first quarter growth fell sharply in April, with the UK economy shrinking.
"In recent months the service sector has provided the main stimulus to economic activity, while retail sales have grown and confidence in the manufacturing sector has held up.
"However, persistently weak productivity - driven by years of underinvestment - alongside rising geopolitical tensions are now weighing on growth. Ongoing conflict in the Middle East is pushing up energy prices and straining international trade, adding further pressure to the outlook.
"Growth at this level will do little to ease the pressures on the Chancellor, as government borrowing remains elevated and tax revenues fall short of spending commitments. The Government has little room for manoeuvre as pressure for increased spending mounts from its own party.
"The impacts of slow growth are increasingly being felt by households. With an ongoing cost-of-living crisis, consumer spending is muted as household budgets are under strain. At the same time, the labour market is cooling, constraining much-needed job growth - particularly for young people.
"The outlook for the rest of this year is one of modest growth. The economy is likely to report growth of around 1% for the year as a whole, with a small improvement in 2027. Inflation remains the immediate challenge for the UK economy, but it remains to be seen how the Bank of England will combat renewed price pressures without extinguishing the little fire still burning in the economy."
Among its locations, UK accountancy and business advisory firm MHA has offices in Aberdeen and Edinburgh.
For more information, visit www.mha.co.uk