UK economy shrank by 0.3% in April following Trump Tariffs hit - as Reeves brands figures 'disappointing'
12 June 2025, 07:09 | Updated: 12 June 2025, 10:11
The UK economy contracted by 0.3% in April according to the Office for National Statistics (ONS), the knock on effects of higher taxes and Donald Trump’s trade tariffs.
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Figures released on Thursday by the ONS showed the economy shrank 0.3% in April - after growing by 0.2% in March and 0.5% in February.
The figures surpassed expectations of a 0.1% contraction, raising further concerns over the knock-on effects of Trump's tariffs war.
Concerns over Trump's threat of rising US import tariffs on the global economy appear to have negatively impacted the UK’s growth prospects appeared increasingly valid.
Rachel Reeves branded the contraction "clearly disappointing" on Thursday, one day after giving her spending review.
The contraction also follows an increase in employer national insurance (NI) contributions following Ms Reeves's announcement last year.
Ms Reeves acknowledged that the latest GDP figures were "clearly disappointing" but insisted her spending review would help deliver growth.
The Chancellor said: "Our number one mission is delivering growth to put more money in people's pockets through our Plan for Change, and while these numbers are clearly disappointing, I'm determined to deliver on that mission.
"In yesterday's spending review we set out how we'll deliver jobs and growth - whether that's improving city region transport, a record investment in affordable homes or funding Sizewell C nuclear power station.
"We're investing in Britain's renewal to make working people better off".
ONS director of economic statistics Liz McKeown said declining output in services and manufacturing sectors both dragged on overall GDP in April.
She said: "However, over the last three months as a whole GDP still grew, with signs that some activity may have been brought forward from April to earlier in the year."
She added: "Both legal and real estate firms fared badly in April, following a sharp increase in house sales in March when buyers rushed to complete purchases ahead of changes to stamp duty."
It comes as Daisy Cooper branded April's GDP figures "a wake-up call for the Government".
The Liberal Democrats' Treasury spokeswoman added: "At the spending review yesterday the Chancellor suggested that the country was on the up but today this claim has not survived contact with reality.
