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Free Malaysia Today
2 days ago
- Business
- Free Malaysia Today
UK economy shrinks by 0.3% in April
The Bank of England has revised down its growth forecast for 2026 to 1.25%. (AP pic) LONDON : Britain's economic output contracted by a worse-than-expected 0.3% in April, when shockwaves from US President Donald Trump's announcement of wide-ranging tariffs hit the global economy, official data showed today. A Reuters poll of economists had forecast that Britain's gross domestic product would fall by 0.1% in April compared with March's level. Britain's economy expanded by 0.7% in the first quarter of 2025, outstripping growth in other countries in the Group of Seven advanced economies and prompting the Bank of England (BoE) to revise up its full-year growth forecast to 1% last month. However, the BoE revised down its growth forecast for 2026 to 1.25% and said it expected the tariffs to knock 0.3% off British output in three years' time. BoE policymakers who are expected to hold interest rates next week are faced with competing forces of stubborn inflation and a relatively sluggish economy. A closely-watched business survey earlier this month suggested much of the economy returned to tepid growth. Business surveys of British firms have generally been downbeat and shown firms slowed their hiring and investment plans due to big increases in labour costs announced by finance minister Rachel Reeves last October. Data published this week showed a fall in consumer spending in May.
Reuters
05-06-2025
- Business
- Reuters
UK's Reeves says economy is turning a corner, eyes energy investment
LONDON, June 5 (Reuters) - More upbeat business surveys as well as strong first-quarter gross domestic product show that the British economy is recovering from a weak end to 2024, finance minister Rachel Reeves said on Thursday. "The most recent GDP numbers, 0.7% growth in the first quarter, the strongest in the G7, and recent business surveys ... are very positive," she said at a dinner hosted by the Confederation of British Industry. "That is good news and does show we are beginning to turn the corner." Purchasing managers' indexes released this week have shown a recovery in activity after a sharp fall in April due to the shock of U.S. President Donald Trump's tariffs. Reeves is due to announce spending plans on Wednesday which will set government departments' budgets up to 2029, covering most of the remainder of her Labour Party's term in office. At the dinner, she pledged to tackle high energy costs that hurt businesses and consumers and said the spending review would include more public investment in energy infrastructure. Reeves repeated a promise not to raise taxes at a future budget by as much as at her first budget in October last year but declined to make more specific commitments on business taxation. ($1 = 0.7357 pounds)
