Archive · 12 Jun 2025
UK Economy Contracts in April Due to Trade Tensions and Tax Shocks
The UK's economy took a hit in April.
The economy shrank due to fewer goods being sold to the US because of taxes on goods.
The end of a temporary tax break also played a part.
The UK's car industry was hurt.
Companies are scaling back hiring and investments, which causes the economy to slow down.
Experts worry about the future, and it will depend on how the government handles the situation.
UK economy contracted 0.3% in April, the largest monthly decline since October 2023.
Exports to the US plummeted due to new tariffs, with the biggest monthly drop on record.
Manufacturing output fell 0.6% while the services sector shrank 0.4% in April.
The end of property tax breaks and rising business costs further strained the economy.
Financial markets showed a muted reaction, but Sterling slightly decreased.
- Who
- The UK economy.
- What
- The UK economy contracted sharply in April.
- When
- April 2025.
- Where
- The UK.
- Why
- Due to falling exports, US tariffs, rising costs, and domestic policy changes.
Government's Stance
Business Perspective
Economic Outlook
Government's Stance
The government is committed to delivering growth through its "Plan for Change."
Business Perspective
Businesses face uncertainty, scale back investments, and a muted response to the GDP figures.
- Economic Contraction
- 0.3% in April
- Worst Drop
- Since October 2023
- Exports to US Decline
- £2 billion
- Manufacturing Drop
- 0.6%
- Trade Deficit Increase
- £4.4 billion
Sources
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UK’s Reeves sets out spending plans to meet ‘working people’s priorities’
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UK’s economy shrinks more than expected, Trump’s trade war hits it hard
