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The UK economic system contracted by 0.3 per cent in April, the steepest month-to-month drop since 2023, underscoring the problem for chancellor Rachel Reeves to spice up development amid larger world uncertainty.
Thursday’s month-to-month GDP determine from the Workplace for Nationwide Statistics was beneath the 0.1 per cent contraction forecast by economists polled by Reuters and follows development of 0.2 per cent in March.
Weak point within the dominant providers sector held again the economic system, with output falling 0.4 per cent. Manufacturing manufacturing fell by 0.9 per cent.
The GDP figures are the primary Donald Trump’s sweeping world tariffs took impact in April. UK corporations have additionally confronted a rise in nationwide insurance coverage contributions since April, whereas households are grappling with larger utility payments.
The newest snapshot of the economic system comes after Reeves on Wednesday delivered the federal government’s spending overview, which promised a lift for the NHS however real-term spending cuts for a lot of Whitehall departments.
Responding to the GDP figures, Reeves mentioned that “whereas these numbers are clearly disappointing, I’m decided to ship on that mission”.
Following the discharge of the info, the pound dipped however remained up 0.2 per cent on the day at $1.357 towards a broadly weaker greenback.
The UK economic system grew by 0.7 per cent within the first three months of this yr, however the Financial institution of England expects that to gradual to 0.1 per cent within the second quarter.
Monetary markets anticipate that the BoE will depart rates of interest unchanged at 4.25 per cent subsequent week, having lowered borrowing prices 4 instances because the summer season of 2024.
