Blow for Rachel Reeves as UK economy sees biggest fall since late 2023
The Office for National Statistics (ONS) said that gross domestic product (GDP) fell by 0.3% in April, compared with growth of 0.2% the previous month. It marks the biggest contraction since October 2023.
It was also worse than the 0.1% contraction expected by most economists.
ONS director of economic statistics Liz McKeown said declining output in services and manufacturing sectors both dragged on overall GDP in April.
READ MORE: Scottish Government 'short-changed by £1bn' by Rachel Reeves, Finance Secretary say
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.'
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.'
Speaking to Sky News, Reeves said 'uncertainty about tariffs' had contributed to a fall in GDP in April, the month Donald Trump announced sweeping levies on imports to the US.
She said: 'We know that April was a challenging month.
'There was a 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 that uncertainty in the world around tariffs.'
She added that the figures for April were 'disappointing, but also perhaps not entirely unexpected, given the uncertainty that is out there in the world at the moment'.
April was dubbed "awful April" as it saw bill rises across a huge range of services including broadband, council tax, and energy bills.
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