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US Tariffs and Tax Hikes Push UK Economy Into April Contraction

April’s downturn follows strong Q1 growth, prompting a spending review to support recovery before the Bank of England decides on interest rates.

Overview

  • Official data show GDP fell 0.3% in April, more than triple the 0.1% decline economists had forecast.
  • Exports to the US plunged by a record £2 billion following President Trump’s new tariffs, dragging overall output lower.
  • Both services output and manufacturing contracted in April, while construction expanded by 0.9%.
  • Chancellor Rachel Reeves called the figures “clearly disappointing” and is banking on her spending review to reignite growth.
  • Slowing wage growth and rising unemployment are damping domestic demand as the Bank of England evaluates its next rate decision.