The UK economy suffered its worst monthly contraction in April since 2023 as Donald Trump’s trade war hit exports and tax increases held back the services sector, underlining Rachel Reeves’ challenge in delivering the growth needed to help finance the government’s spending plans.
The 0.3 per cent GDP decline was the steepest since October 2023 and below the 0.1 per cent contraction forecast by economists polled by Reuters. It followed growth of 0.2 per cent in March.
Output in the dominant services sector fell 0.4 per cent, with the end of a tax break on home purchases hurting estate agents and law firms. The value of goods exported to the US fell by the most on record, suggesting activity was brought forward in previous months ahead of the sweeping tariffs that took effect in April.