Accrington to close academy despite council offer
Accrington Stanley have confirmed they will close their academy despite the offer of a grant by Hyndburn Council.
The League Two club previously announced it would be forced to close the academy as a cost-cutting measure.
That came amid a row with the council over the loss of revenue from the use of club facilities for non-matchday events after the council revoked its entertainment licence following noise complaints from neighbours.
The council had offered to put forward the £140,000 which it said in a statement would "be the figure required to keep the academy operational for the next 12 months" but the club has now turned down that offer.
"While we genuinely appreciate their offer, a detailed review of the club's financial situation and immediate challenges has made it clear that this support would not address the wider issues we are facing," a club statement said.
"During these discussions, the club outlined its ambitions and financial responsibilities, particularly as we look ahead to the 2025-26 season.
"After careful consideration, the board has concluded that continuing to operate the academy at this time is not a viable option, even with the council's proposed financial assistance."
Accrington finished the 2024-25 League Two season in 21st place and eight points off the relegation places.
That finish came as a row with the local council continued late into the campaign, with owner Andy Holt eventually saying he would step down from his position as chairman.
He eventually agreed to continue funding the club by up to £250,000 per season.
"The enforced closure of our function rooms, rising costs - such as National Insurance and minimum wage increases - combined with no forthcoming resolution to the club's planning issues have placed an ever-growing financial burden on our club and subsequently on our owner who is now in his 11th year of financially supporting Accrington Stanley FC," the statement added.
"This situation has compelled the club to reassess its strategy for the upcoming season and beyond.
"Despite Andrew Holt's continued generosity, the lack of significant revenue streams to offset these escalating expenses has left us with no option but to implement difficult yet necessary cuts."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
32 minutes ago
- Yahoo
Reeves's public sector obsession will crush the economy
Rachel Reeves has cemented 'historic changes' to enlarge the British state, according to one of the nation's leading economists, with the battered private sector now looking at permanently higher taxes to support it. Paul Johnson, the head of the Institute for Fiscal Studies, says it is hard to overstate the scale of the shift taking place in the economy this decade, as government spending mounts on public services, welfare and debt interest – and taxes rise to match. 'These are historic changes in the size of the state and the size of taxation in this country,' says Johnson. 'Over all of my lifetime up until 2020, taxes hovered around 33pc of national income. By the end of this decade they will be 38pc of national income. I cannot see them coming down. 'In economic history terms I think this decade will be seen as the decade in which the British state grew.' An older and sicker population suggests the state will only get bigger. Analysis by the Resolution Foundation, a think tank, shows that Reeves has put health spending on course to gobble up half of all the money spent on day-to-day services by the end of the decade. This is up from a third in 2010 and roughly a quarter in 1999. 'That is a huge increase. Everything else pales a bit in significance,' says James Smith, an economist at the Resolution Foundation. 'We are becoming ever more a health state.' The proportion may rise even more after Labour publishes its 10-year plan for the NHS later this year. Previous proposals outlined by the Tories suggested that making the health service fit for the future would require a 50pc rise in the number of staff to 2.4m by 2037. Such an increase would mean one in 11 workers in England would be employed by the NHS, compared with one in 17 in 2021, according to the IFS. Ruth Curtice, the Resolution Foundation chief executive, said the clear shift towards higher health spending constituted a 'major reshaping of the state'. Labour is using its gigantic parliamentary majority to push through such seismic change. Yet at the same time the economy is weakening, undermining Reeves's ability to pay for her grand spending plans. GDP dropped by 0.3pc between April and March, suggesting the strong growth seen during the first three months of the year was not the start of a sustained recovery. The Chancellor has blamed Donald Trump's trade war for knocking Britain off course, and it undoubtedly had an effect. However, there is no sense that Reeves has adapted her plans to cope with Trump's crusade, which has been known about for months. Furthermore, April's GDP numbers also show clear signs that it was Reeves, not Trump, who was to blame for the slowdown. The services sector performed particularly poorly, with retail struggling amid the sharp rise in employers' National Insurance contributions, the tax bosses pay on workers' wages, and the minimum wage. Unemployment is up and the number of people in work is down, another sign that this 'jobs tax' is weighing on hiring. Worryingly, Britain is relying more and more on public spending to keep the economy afloat. Recent analysis by the Bank of England shows that activity has essentially been driven by the public sector over the past two years. That's not a sustainable model for growth, particularly given the dire productivity in the public sector. Businesses are increasingly frustrated. Simony Emeny, the chief executive of pub group Fuller's, argues the private sector is being forced to work far harder than the public sector. 'Because of what the Chancellor announced last year, we have had to work really hard to make our businesses as efficient as possible and use technology well and to make sure that we are in a position where we can absorb some of these cost increases,' he says. 'If I look at the Government, I don't see that same drive to improve efficiency coming through.' He cited the rise in the number of civil servants, which has soared from below 420,000 in 2016 to 550,000 today. 'The [hospitality] sector is having to be forensic about costs just to navigate the challenges we face and I'm not seeing that same scrutiny from the Government. [They] need to be consistent about this,' says Emeny. 'They're putting a lot of pressure on business with extra costs. We're having to absorb that this year, and so is everybody else.' Fuller's and other businesses may have to absorb even more costs later this year. With pressure to spend yet more on healthcare and benefits, and amid scepticism that many of the plans set out in the spending review are realistic, economists believe more tax rises await in the autumn. Johnson, at the IFS, suspects the long freeze on income tax thresholds will be extended – a classic stealth tax, as workers end up paying more tax even if their pay only rises in line with inflation – meaning they become worse off over time. But that alone may not be enough. Andy King, a former senior official at the Office for Budget Responsibility (OBR), the Government's spending watchdog, says it is almost certain to slash its growth forecasts at the Budget in the autumn, in part because of Reeves's own policies. 'The immigration policy looks net negative for growth, employment rights need to be scored, the employer NICs and national living wage rises look to have done much more damage to employment than was allowed for,' he says. 'The writing seems to be on the wall for another fiscal hole in the autumn.' That points to yet another tax raid, despite the record-breaking £40bn of tax increases in the Budget last October, which was supposed to put the finances back on an even keel for the rest of this parliament. King suspects the Chancellor will have to ramp up the big taxes she has promised not to touch: VAT, National Insurance or income tax. 'Now that the spending plans have been inked in, it leaves fewer levers for restoring fiscal headroom. So it looks like a rock and a hard place for the autumn. Something important may have to give if there is a material fiscal hole to fill,' he says. 'That means either loosening the fiscal targets, which look very risky given the way the bond market is viewing the UK relative to its peers. Or it means breaking manifesto tax commitments which looks, as Sir Humphrey might say, brave, bordering on courageous.' Whatever form tax rises end up taking, it will extend what has become a well-established pattern under Labour: raid the private sector to pay for ever higher state spending. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
32 minutes ago
- Yahoo
UK fashion sector slumps with May showing slowest growth of 2025
Data from the latest British Retail Consortium (BRC)-KPMG Retail Sales Monitor reflected a 1.1% year-on-year decrease in non-food sales for May, consistent with the same 1.1% drop recorded in May of the previous year. Last month, BRC reported that consumer sentiment in the UK rose in May, from -48 in the previous month as economic expansion persisted. BRC chief executive Helen Dickinson said: "Consumers put the brakes on spending, with the slowest growth in 2025 so far. This was due largely to declines in non-food sales, as fashion and full price big-ticket items were held back by lower consumer confidence.' "Retailers are grappling with the £5bn ($6.78bn) in extra costs from higher National Insurance contributions and wages, which kicked in during April. They also face an additional £2bn later this year from new packaging taxes and remain concerned about the consequences of the Employment Rights Bill. Ensuring the new bill supports workers' rights without undermining retailers' ability to continue to provide jobs and investment in people will determine whether the government achieves economic growth across the country or not," Dickinson added. Over the four weeks to 31 May 2025, in-store sales of non-food items saw a 0.9% year-on-year reduction, compared with a 2.6% decrease in the same month of 2024. Online sales of non-food items also fell by 1.5% year-on-year in May, contrasting with a 1.5% increase in May 2024. The rate of online purchases for non-food items remained steady at 35.9% in May, mirroring the same percentage from May 2024. Overall, UK retail sales witnessed a 1% year-on-year increase in May, surpassing the 0.7% rise seen in May 2024. Food sales specifically saw a 3.6% year-on-year uptick in May, exceeding the 2.8% increase from May of the prior year. In the growth rankings for online sales categories, clothing and footwear experienced a decline, whereas health and beauty, along with household textiles, saw an upward trajectory. KPMG retail & leisure consumer head Linda Ellett said: 'While the sunshine continued, the pace of retail sales growth didn't in May. Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises. But May still saw slight growth, driven mainly by food and drink, with non-food purchases falling overall. 'Travel demand for the summer months ahead looks healthy, so retailers will be hoping June sees an upturn in related spending as people begin to think about what they want to pack in their suitcase.' "UK fashion sector slumps with May showing slowest growth of 2025" was originally created and published by Just Style, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
an hour ago
- Yahoo
Reeves accused of ‘making up numbers' in spending review
Credit: Institute for Fiscal Studies Rachel Reeves has been accused of 'making up numbers' in her spending review after she failed to give clear guidance on how departments would make savings. Paul Johnson, director of the IFS, said his think tank 'can't find any particular area of spending the Government has decided it wants to withdraw from', barring overseas aid, under the plans unveiled by the Chancellor on Wednesday. Ms Reeves has said repeatedly that the Treasury had examined every department's spending ambitions 'line by line' in a detailed process known as a zero-based review. However, Mr Johnson said virtually every department faced 'exactly the same cut in its administration budgets' of 10pc over the next three years and then another 5pc in 2029-30. During the IFS analysis of Ms Reeves's spending review, he said this was 'irrespective of [any] planned spending increase' for each department. Visibly shrugging in the online event, Mr Johnson said: 'That is not the result of a serious department by department analysis. I hesitate to accuse the Treasury of making up numbers, but…' Mr Johnson warned that the Chancellor was only keeping within her borrowing rules by a 'gnat's whisker', adding that 'any move in the wrong direction will almost certainly spark more tax rises'. The criticism is a further blow to the Chancellor after official figures today showed Britain's economy shrank at the start of the second quarter. UK gross domestic product (GDP) contracted by 0.3pc during 'awful April' in the biggest monthly drop since October 2023, according to the Office for National Statistics (ONS). This was worse than analysts' fears that the economy would shrink by 0.1pc and follows a 0.7pc expansion during the first three months of the year. At the start of April, businesses grappled with Ms Reeves's hikes to National Insurance contributions and an increase in the minimum wage. The data also covers the month when Donald Trump launched his so-called 'liberation day' tariff onslaught, and showed that UK exports to the US slumped by a record £2bn in April. Suren Thiru, economics director at ICAEW, said: 'These figures suggest that the UK's economic fortunes took a notable nosedive in 'Awful April' as skyrocketing bill and tax rises, coupled with the chaos over US tariffs, suffocated overall output. 'April's decline is probably the start of a more sobering period for the UK economy with the damage from spiralling costs and intensifying global uncertainty set to slow growth sharply this quarter, despite elevated government spending.' Thanks for joining us today. That's all for this blog but do join us on our main business pages for the latest analysis and reports on the economy. Most British people think they have personally been hit by tax rises in recent years and would favour the burden being cut, according to a poll from the Adam Smith Institute. It found that just 5pc of Britons think their taxes are well spent. Some 28pc said they would 'strongly support' a cut in tax rates, even if this meant a reduction in public spending. Overall, 57pc support cutting taxes. Only 7pc would 'strongly oppose' tax cuts. James Lawson, chairman of the Adam Smith Institute, said: 'Brits are being overtaxed and underserved. Our polling shows that they are fed up with paying sky-high taxes to a series of governments which they don't believe have delivered good value for money. 'The fact that only 5pc of Brits believe that their taxes are being properly spent hammers home the scale of public anger and distrust.' IFS director Paul Johnson said Rachel Reeves's spending plans were leading to a 'big increase' in the size of the British state. The FTSE 100 and the pound moved higher after the latest US wholesale inflation figures came in as expected despite Donald Trump's tariff tirade. In some welcome short term relief for the Chancellor, the UK's blue-chip stock index was up 0.2pc after the US producer price index — which measures inflation before it hits consumers — rose 2.6pc in May, according to the Labor Department. Separate data showed US filings for jobless benefits were unchanged last week. Sterling rose 0.5pc against the dollar to more than $1.36 as traders bet that the US Federal Reserve would cut interest rates twice this year following the data. UK government borrowing costs also fell at a faster pace than European peers, with bond yields dropping nearly seven-basis points to 4.48pc. Gilt yields – the return the government promises to pay buyers of its debt – rose faster than comparable markets on Wednesday after Rachel Reeves announced her spending plans. One piece of good news for Rachel Reeves has been the easing of government borrowing costs. The yield on 10-year UK gilts – a benchmark for the cost of servicing the national debt – has fallen nearly six basis points 4.49pc on bond markets. There has been a decline in yields – the return governments promise to buyers of its debt – across the board in a flight to safety by investors. Traders have been spooked by Donald Trump saying he would send letters to countries outlining the terms of trade deals in weeks, prompting a shift away from riskier stocks and into the safer returns of bonds. UK borrowing costs had risen slightly on Wednesday in the wake of the spending review. The pound fell against the euro in the wake of the spending review and official figures showing a contraction in the UK economy in April. Sterling fell 0.6pc to a six week low against the euro at €1.173. Nick Andrews, an analyst at HSBC, said: 'Thursday's data shows the UK economy continues to face challenges.' By contrast, terling was up 0.2pc against the dollar as the US currency weakened against global major currencies over tariff fears. Donald Trump sparked uncertainty as he said he would send out letters in one to two weeks outlining the terms of trade deals to dozens of US trading partners, which they could embrace or reject. The dollar was last down 0.7pc against a basket of currencies, having hit its lowest since March 2022. It was down 1pc versus the euro, which hit a three-year high as investors turned to the single currency as a safe haven in the turmoil. Britain is becoming a 'national health state' under Rachel Reeves, with treatment poised to account for half of all public services spending by the end of the decade. Analysis by the Resolution Foundation said the Chancellor was presiding over a 'major reshaping of the state' that will pave the way for more tax rises after she boosted NHS budgets in the spending review. The Left-leaning think tank said the health service was on course to account for almost £1 in every £2 of all day-to-day Whitehall spending by the next election. This is up from a third in 2010 and a quarter in 1999. Kemi Badenoch warned the UK economy faced a 'significant risk of a death spiral' because of Labour's spending plans. The Tory leader told the Peel Hunt FTSE250+ conference that 'bond vigilantes' were 'circling' Britain because they do not believe current levels of government debt are sustainable. She said: 'Government debt is unsustainable. The bond markets have already noticed. The bond vigilantes are circling. 'If Labour think they can pile on more borrowing, more spending and more tax without consequences, they are deluded. 'There is a significant risk of a death spiral and no one can say we weren't warned.' IFS director Paul Johnson said his think tank had been 'baffled' by the Chancellor's spending review. He said Rachel Reeves will 'have all her fingers and all her toes crossed' that OBR borrowing and growth forecasts are not downgraded in the autumn, which would 'almost certainly spark more tax rises'. He said: 'It did not appear to be a serious effort to provide any useful information to anybody. I hope you find what we have to say somewhat more enlightening. 'To be fair to HM Treasury though the spending review document was a model of clarity. Thank you. 'Second, nobody should be in any doubt that the Chancellor has had some incredibly tough decisions to take and balancing acts to perform. 'The fiscal constraints are all too real and we can't have everything we might want. One can quibble over precise allocations but what we saw was a perfectly reasonable set of prioritisations. 'The real test will be in how well the money is spent, and especially how effectively the capital spending is spent and managed. 'That's the tough day-to-day business of government and, somewhat out of the spotlight of these big set piece events. It's on that more than anything that the government will be judged. 'Third, this was not a 'fiscal event' in the sense that total spending levels had already been announced. Ms Reeves is now going to have all her fingers and all her toes crossed, hoping that the OBR will not be downgrading their forecasts in the autumn. 'With spending plans set, and 'ironclad' fiscal rules being met by gnat's whisker, any move in the wrong direction will almost certainly spark more tax rises.' Tesco boss Ken Murphy has warned the Chancellor not to increase taxes for the high street, amid mounting fears that she will be forced to launch a further raid on employers this autumn. The chief of Britain's biggest supermarket said retailers were already wrangling with the 'substantial additional costs' that they were hit with in the last Budget, including the Chancellor's £25bn National Insurance raid. Mr Murphy said: 'We would strongly urge and hope that the Government would not be looking to place additional burden on the retail industry at this stage.' It comes after economists warned that tax rises were now 'very likely' after Rachel Reeves announced billions of pounds of new spending on public services and infrastructure projects. Business leaders are concerned that it could mean a further tax raid on companies, despite signs higher employer costs are already weighing on economic growth. On Thursday, official figures revealed the economy shrank earlier this year, falling by 0.3pc during April as businesses were struck by a surge in worker costs. From April, the Chancellor increased the rate of employer National Insurance contributions (NICs), and lowered the threshold at which companies start paying it. Tesco said this step alone would add an extra £250m to its costs each year. It has also been struck by an increase in the minimum wage and a net zero grocery tax. On Thursday, Tesco said the tax increases were already feeding through to higher prices in stores. Mr Murphy said: 'If you ladder up all of these costs, they are having a substantial impact on the retail industry.' He said food inflation was being fuelled by 'all the new taxation and regulatory costs on the industry', pointing to recent rises in meat and poultry prices. Rachel Reeves has been accused of 'making up numbers' in her spending review after she failed to give clear guidance on how departments would make Johnson, director of the IFS, said his think tank 'can't find any particular area of spending the Government has decided it wants to withdraw from – other, perhaps, than overseas aid' under the plans unveiled by the Chancellor on the IFS analysis of Ms Reeves's spending review, he said virtually every department faced 'exactly the same cut in its administration budgets' of 10pc over the next three years and then another 5pc in said this was 'irrespective of [any] planned spending increase' for each during the online event, Mr Johnson said: 'That is not the result of a serious department by department analysis. I hesitate to accuse the Treasury of making up numbers, but…' Tax rises are on the way as Rachel Reeves faces another black hole in her finances, according to a former top official who has warned 'the writing seems to be on the wall' for the Chancellor's plans. Andy King, a former boss at the Office for Budget Responsibility, said the watchdog is likely to slash its growth forecasts, wiping out much of Ms Reeves's £9.9bn financial buffer, forcing her to ramp up taxes yet again. 'We are not well placed at all. Attention will inevitably turn to how a new fiscal hole is going to be filled come the autumn,' Mr King said at an event hosted by the Resolution Foundation. 'The immigration policy looks net negative for growth, employment rights need to be scored, the employer NICs and national living wage rises look to have done much more damage to employment than was allowed for. 'The writing seems to be on the wall for another fiscal hole in the autumn.' The former member of the Budget Responsibility Committee, and now a partner at Flint Global, said the OBR was 'strikingly optimistic' in its forecasts last month, raising the odds of a serious downgrade next time it crunches the numbers. 'Now that the spending plans have been inked in, it leaves fewer levers for restoring fiscal headroom. So it looks like a rock and a hard place for the autumn. Something important may have to give if there is a material fiscal hole to fill,' he said. 'That means either loosening the fiscal targets, which look very risky given the way the bond market is viewing the UK relative to its peers. Or it means breaking manifesto tax commitments which looks, as Sir Humphrey might say, brave, bordering on courageous.' Rachel Reeves is likely to spend more than what she has laid out in the spending review due to pressure from government departments, economists have warned. The Chancellor has created 'particular risk' to the public finances by front loading her spending plans, according to the IFS. Paul Johnson, director of the think tank, said that spending review plans are nearly always reopened 'and almost always in an upwards direction', meaning that government outlays would likely rise. He said that health and defence would likely push for more funding despite their generous increase in budgets, while education's budget 'looks tight'. He said: 'Day-to-day spending rose 2.6pc last year and is due to increase by 2.5pc this year then by 1.8pc in 2026-27 and by just 1pc in each of 2027-28 and 2028-29. 'If that last year's spending plans aren't topped up at some point I'll be very surprised indeed.' Nearly half of businesses in London expect prices to increase this year amid the challenging economic outlook, a survey showed. About 45pc of 500 companies questioned by London Chamber of Commerce after Rachel Reeves unveiled her spending review said they were bracing for a jump in costs. Some 42pc said they think the Government does not understand business. The chamber's chief executive Karim Fatehi said: 'London businesses want to grow, create jobs, and deliver the economic growth the UK so desperately needs, but many are concerned that the government doesn't understand them and the challenges they face. 'In the last year alone, businesses have weathered a cost-of-living crisis, increased taxes and international trade disputes. London businesses are resilient, but they urge the Chancellor to use the Spending Review and the upcoming Autumn Budget as an opportunity to listen to the London business community and give them the confidence they need to invest and grow.' Many bosses in the capital were also concerned that the Chancellor was pursuing economic growth across the country and the expense of London, after Ms Reeves announced funding for a series of infrastructure projects. Mr Fatehi added that capital spending projects 'must not be at the expense of London'. Britain's economy has been put on track for a 'dismal second quarter', economists have warned. Julian Jessop of the Institute of Economic Affairs think tank said the UK's recovery has 'clearly stalled' after GDP contracted by 0.3pc in April. He admitted the downturn in Britain's economy was partly due to factories bringing forward orders earlier this year in an effort to beat tariffs imposed by Donald Trump. However, he warned: 'There was a large drag too from the increases in staffing costs and in many household bills, which hit business and consumer confidence hard. 'Some surveys suggest May might be less bad, especially with fears of a global trade war now receding. However, job losses appear to be accelerating, wage growth is slowing, and inflation has jumped, which will all continue to weigh on spending.' He added: 'The recovery has clearly stalled. Growth in the second quarter as a whole is now likely to be close to zero, and government policies are at least partly to blame.' UK stocks fell as investors became 'wary' about the outlook for Britain's shrinking economy. The domestically-focused FTSE 250 sank 0.6pc while the blue-chip FTSE 100 was down 0.1pc after UK GDP contracted by 0.3pc in April. Travel and leisure businesses were the worst hit by Britain's rockier economic prospects, falling 2.1pc across the two indexes. Sanjay Raja, chief UK economist at Deutsche Bank, said: 'While the UK economy has been fairly resilient this year, we expect GDP growth to track below potential in 2025, before gradually returning to trend next year.' Neil Wilson, an analyst at Saxo UK, added: 'The UK economy can expand at a much more rapid rate but it depends on the right fiscal and monetary policy mix, and I am not sure we are seeing all the ducks in a row just yet. Tax hikes are in the post and these are the big worry for investments.' However, he said investors 'need to be wary about the headwinds facing the UK economy' there remain some positives. 'Firstly, the FTSE 100 is not heavily correlated to the UK economy, albeit the FTSE 250 is a lot more closely related. 'Any slowdown, as shown by the very weak jobs report on Tuesday, can be met with an easier policy path from the Bank of England, which would tend to nudge sterling lower. 'With a strong international earnings presence in the FTSE 100, this tends to be a positive.' The value of the pound has fallen after official figures showed Britain's economy shrank by more than expected in April. Sterling was down 0.1pc against the dollar to $1.353 and fell 0.3pc against the euro to €1.176 as UK GDP contracted by 0.3pc at the start of the second quarter. Adam Deasy, economist at PwC, said: 'Many of the spending priorities announced by Chancellor Rachel Reeves yesterday will take time to bear 'growth-shaped' fruit. 'The question is whether the UK economy will pick up steam in the meantime. 'Today's data, a weakening labour market, and worsening business sentiment point to a slowing growth outlook in the near-term and strengthen the case for further rate cuts from the Bank of England.' Hailey Low, associate economist at Niesr said the figures indicated that the Chancellor's 'increases in employers' National Insurance contributions and wider cost pressures have weighed on activity'. Traders are increasing bets that the Bank of England will cut interest rates in August after Britain's economy shrank by more than expected in April. Money markets indicate that policymakers will cut borrowing costs two more times by the end of the year after GDP contracted by 0.3pc during the month. Traders are betting there is a 85pc chance of a rate cut in August, up from 81pc on Wednesday. Paul Dales, chief UK economist at Capital Economics, said the GDP figures were 'one more piece of news pointing to another cut in August'. He added: 'The economy will be held back by subdued overseas demand and domestic businesses cutting back on spending to compensate for the rise in costs driven by April's increase in taxes. 'We're still expecting GDP growth of just 1pc for the year as a whole, which would be no better than last year and is a little weaker than the consensus.' Kemi Badenoch accused the Government of waging 'war on the private sector' after the spending review, but declined to say what she would do differently. The Conservative leader told BBC Radio 4's Today programme: 'What we should be talking about is reform of public services. They're just giving more and more money. 'This is a war on the private sector, where private businesses are having to cut their coat according to their cloth. They're having to downsize. They're having to let go of staff, but no reforms are being asked for any parts of the public sector. 'Of course, we want to fund public services, but we need to make sure that we're doing things better.' But asked repeatedly to set out what the Government should stop doing, or whether she would reverse last year's rise in National Insurance, Mrs Badenoch declined to answer. She said: 'There's no election today. What I'm not doing is setting out a manifesto for four years' time.' Britain's goods exports to the US fell by £2bn in April compared to the previous month, which was the largest drop since official records began in 1997. The value of goods exports to the United States during the month fell to its lowest level since February 2022 at the start of the Ukraine war. Imports of goods from the US, including precious metals, decreased by £400m in April. Overall goods exports fell by £2.7bn compared to March as sales into the EU also dropped, according to the Office for National Statistics. Rob Wood, chief UK economist at Pantheon Macroeconomics, said: Exports should begin to stabilise in May now that the front-running has unwound and after President Trump began walking back some of his more ruinous tariffs. 'That said, the UK-US trade deal 'agreed' in May is yet to fully come into force so there could be further export weakness still ahead.' Stock markets fell slightly in London after data showed a contraction in the British economy. The FTSE 100 edged lower to 8,862.31 while the mid-cap FTSE 250 fell 0.1pc to 21,361.25. Stocks were protected from heavier falls as investors continued to feel relief after Wednesday's US inflation figures, which came in as expected at 2.4pc in May. Britain's manufacturing sector contracted by 0.9pc in April and faces a period of weakness as Donald Trump's tariffs hit demand, economists have warned. Yael Selfin, chief economist at KPMG UK, said Britain's economy 'lost steam in April amidst global trade disruptions'. He said: 'Today's weak GDP data partially reflects the impact of trade-induced uncertainty that weighed on the economy in April. 'The effect was particularly pronounced in the manufacturing sector, which saw output contract by 0.9pc. 'Manufacturing activity is likely to remain weak in the near term against a backdrop of sluggish global demand. 'Weaker activity was also driven by property transactions brought forward ahead of the increase in stamp duty in April, as well as weaker wholesale trade. 'While the recently announced trade deals offer businesses a degree of policy certainty, tariffs on UK exports to the US are higher than their pre-April levels. 'This is expected to act as a headwind for UK trade in the medium term. Moreover, global trade tensions continue to pose a key risk. A disappointing outcome in the US-EU trade negotiations would likely have adverse spillover effects on the UK economy.' The shadow chancellor accused Rachel Reeves of 'economic vandalism' after Britain's economy shrank in April. Mel Stride said: 'Before the election Labour promised 'growth, growth, growth' but today's fall in GDP lays bare the disappointing consequences of Rachel Reeves' economic vandalism. 'Yesterday, the Chancellor should have taken corrective action to fix the problems she has caused. But instead her spending review has all but confirmed what many feared: more taxes are coming. 'Under Labour, we have seen taxes hiked, inflation almost double, unemployment rise, and growth fall. With more taxes coming, things will only get worse and hard-working people will pay the price.' Rachel Reeves blamed Donald Trump for the UK economy shrinking in April. The Chancellor said the US president's tariff war had created 'huge uncertainty' and had hit UK exports and production. She resisted the suggestion that her tax increases, which came into effect in April, had also contributed to the economy shrinking for her reaction, Ms Reeves told Sky News: 'Disappointing but also very volatile and GDP on a monthly basis does move around quite a lot but we also know that April was a challenging month. 'There was huge uncertainty about tariffs and one of the things, if you dig into those GDP numbers today, is exports weakening and also production weakening because of the uncertainty in the world around tariffs. 'So disappointing but also perhaps not entirely unexpected given the uncertainty that is out there in the world at the moment.' Asked if it was fair to say that her increase to employer National Insurance contributions had contributed, Ms Reeves said: 'Everyone knew that those tax changes were coming in April. But the crucial thing is I didn't increase the taxes that ordinary working people pay.' Michael Saunders, a former member of the Bank of England's monetary policy committee and senior adviser at Oxford Economics, says the economy is likely to stay 'sluggish' for the rest of the year. He told BBC Radio 4's Today programme: 'The level of interest rates is still quite high, monetary policy is still quite tight, global trade uncertainty is high and that's hitting exports from many countries around the world and the Government is tightening fiscal policy. 'Public spending is going up but taxes are going up even more, so the net effect is to reduce demand, and you can see that reflected – that vacancies are falling, job growth is slowing and unemployment is rising. 'The Chancellor said the UK was the fastest growing economy in the quarter among the G7 but I don't think that's going to be the case for the year as a whole.' Britain's economy faces a 'more sobering period', economists have warned, as official figures showed the dominant services sector was severely hit after Donald Trump unleashed his tariff onslaught. Monthly services output – the most significant sector of the UK economy – fell by 0.4pc during the month after growth of 0.4pc in March. It was the first decrease in services output since October last year and was the largest contributor to the 0.3pc fall in GDP. Britain's economy had started the year so well with expansion of 0.7pc in the first quarter, including 0.2pc growth in March. ICAEW economics director Suren Thiru said: 'These figures suggest that the UK's economic fortunes took a notable nosedive in 'Awful April' as skyrocketing bill and tax rises, coupled with the chaos over US tariffs, suffocated overall output. 'April's decline is probably the start of a more sobering period for the UK economy with the damage from spiralling costs and intensifying global uncertainty set to slow growth sharply this quarter, despite elevated government spending. 'Weaker growth is a headache for the Chancellor as it makes generating the revenue government needs to support its sizable spending plans more difficult, increasing the chances of further tax rises in the Autumn Budget. 'Though the door is probably closed on an interest rate cut next week, these downbeat figures increase the likelihood of a policy loosening in August, despite lingering concerns over high inflation.' Rachel Reeves said the contraction in the economy was 'clearly disappointing'. 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.' Britain's economy shrank by more than expected in April after the largest monthly fall in exports to the US on record, according to official figures. ONS director of economic statistics Liz McKeown said: 'After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States with decreases seen across most types of goods, following the recent introduction of tariffs.' Britain's economy shrank at the start of the second quarter in a blow for the Chancellor after her spending review. UK gross domestic product (GDP) contracted by 0.3pc during the month, according to the Office for National Statistics. This was worse than analysts' fears that the economy would shrink by 0.1pc and follows a 0.7pc expansion during the first three months of the year. The data covers the month when Donald Trump launched his so-called 'liberation day' tariff onslaught which threatened to upend global trade. It comes a day after economists warned that Britain faces tax rises in the autumn after Rachel Reeves unveiled her spending review. The Chancellor has made growing the economy one of her key missions as she battles to shore up the public finances. Thanks for joining me. Britain's economy shrank by more than feared in April in a blow for Rachel Reeves as she seeks growth to power her spending plans. Here is what you need to know. 'Perverse' benefits system is unsustainable, warns Liz Kendall | Plans to cut Pip and health element of universal credit face mounting criticism from Labour MPs US-China trade deal is done, says Trump | Agreement includes access to rare earth materials, but must be approved by Xi Jinping Poundland rescue deal in doubt as councils seek unpaid business rates | Millions of pounds' worth of overdue taxes risk deterring potential buyers of discount retailer Jeremy Warner: Businesses up and down the land will be laughing in the Chancellor's face | Rachel Reeves plans £50bn more on day-to-day spending than Tory predecessors Sam Ashworth-Hayes: Mass migration isn't Britain's lifeblood. It's an economic disaster | Immigration narrative is being used to justify the errors of generations of politicians Asian shares were trading mixed early Thursday after Wall Street's rally stalled as investors appeared not to react much to the results of the latest round of China-US trade talks. Japan's Nikkei 225 lost 0.5pc to 38,213.20. Hong Kong's Hang Seng sank 0.5pc to 24,234.80, while the Shanghai Composite index edged 0.1pc lower to 3,404.66. In South Korea, the Kospi gained 0.8pc to 2,929.94, while Australia's S&P/ASX 200 edged 0.1pc higher to 8,604.50. Taiwan's Taiex lost 0.8pc. On Wall Street, the Dow Jones Industrial Average finished a day of choppy trading little changed, at 42,865.77, while the S&P 500 fell 0.3pc, ending at 6,022.24, and the Nasdaq lost 0.5pc, closing at 19,615.88. In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.427pc from 4.471pc late on Tuesday. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
