The UK economy shrank in April, as companies were buffeted by Donald Trump’s trade war and higher taxes.
The latest GDP report has confirmed TS Eliot’s line that “April is the cruellest month”.
The economy shrank by 0.3% during April, the Office for National Statistics (ONS) said, a bigger fall than expected, and one that may fuel concerns that the economy is weakening.
April began with Trump announcing large tariff increases on US trading partners but was also the month when UK employers started paying higher national insurance contributions.
The ONS says services output fell by 0.4% in April, after growth of 0.4% in March, and was the largest contributor to the fall in GDP in the month.
Production output also decreased, by 0.6%, but construction output rose by 0.9% in April.
UK trade with the US plunged in April, as Trump’s announcement of new tariffs hit demand for goods.
Exports of UK goods to the US fell by £2bn in April, the ONS said, which is another factor why the UK economy shrank so sharply during the month.
This is the largest monthly decrease in trade with the US since records began in January 1997 and follows four months of consecutive increases.
The ONS said this decline was “likely linked to the implementation of tariffs on goods imported to the United States”.
Britain is slowly turning into a “National Health State”, as lower-income families gain most from Wednesday’s spending review.
That is the conclusion of the Resolution Foundation, which has been analysing Rachel Reeves’s announcement yesterday.
The thinktank found that health accounted for 90% of the extra public service spending announced, meaning half of public service spending is set to be on health by the end of the decade.
It also predicts that Reeves may need to look at tax rises in the autumn budget because of the “weaker economic outlook and the unfunded changes to winter fuel payments”.
The agenda • 1.30pm BST: US weekly jobless claims report • 1.30pm BST: US PPI index of producer prices for May
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