UK economy began to feel fallout from Iran war in April, data shows

By Andy Bruce and Suban Abdulla

LONDON, June 12 (Reuters) - Britain's economy contracted by 0.1% in April, its first monthly drop since August as the Iran war's cancellation of Formula 1 Grand Prix races and other Gulf sporting events delivered a heavy blow to the British entertainments industry.

The data showed the first clear signs of an impact from the U.S.-Israeli war on Iran in terms of British economic growth.

The Office for National Statistics (ONS) said output in the services sector declined in April by 0.2%, dragged down by administration and support services, as well as the arts, recreation and entertainment sectors.

An ONS official said there were reports that cancellation of sporting events in the Middle East had hit related British firms.

The outbreak of war resulted in the cancellation of Formula 1 Grand Prix races in Bahrain and Saudi Arabia, which had been due to take place in April. Tennis and soccer events were also called off.

Manufacturing output rose by 0.4% in April - helped by a rise in pharmaecuticals production which is often sees large swings - helping to offset a bad month for the services sector.

Output in the three months to April was 0.7% higher than the previous three months, as economists had expected.

(Reporting by Andy Bruce and Suban Abdulla; Editing by William James)