UK Economy Shrinks 0.3% in April on Tariff Impact

The UK economy contracted by 0.3% in April 2025, marking its largest monthly decline in 18 months and surpassing economist expectations. Both services and manufacturing saw declines, with manufacturing output dropping 0.9%, especially in transport equipment and chemicals. The downturn has been linked to wide-ranging tariffs imposed by US President Donald Trump, which hit exports to the US and increased global trade uncertainty. Higher labor costs and a recent decline in consumer spending further contributed to the contraction. Despite these challenges, some analysts note that economic activity may have shifted to earlier months, resulting in overall growth for the last three months. The data has put pressure on the Pound Sterling and sparked concerns over potential tax rises and the government's ability to meet growth and spending targets.