UK GDP Slides in April as Trade Tariffs and Tax Hikes Bite

The UK economy shrank by 0.3% in April, marking a sharp slide from March’s 0.2% growth and exceeding economists’ forecasts of a 0.1% decline. 

This downturn coincided with the implementation of US tariffs as well as a wave of domestic tax increases. The Office for National Statistics reported steep drops in both industrial production and services output, while construction managed modest growth. 

The most striking data point was the record plunge in UK goods exports to the US, triggered by a new 10% reciprocal tariff.

While the UK escaped the harsher 20% tariffs levied on EU goods, the economic consequences were immediate. The US remains a key trading partner, and April’s figures showed the volatility introduced by these trade disruptions. 

On the domestic front, the end of the Stamp Duty Land Tax relief caused residential property transactions to plummet by 63.5% from the previous month, as buyers had rushed to close deals before the deadline.

The 0.3% April contraction contrasts sharply with the 0.7% growth in Q1, which economists now say was due to hasty and pre-emptive trading activity ahead of the tariff hikes. Looking ahead, the Bank of England projects only 1% GDP growth for 2025. 

What Does This Mean for Me?

Analysts expect second-quarter growth to slow to between 0.1% and 0.2%, as weak job data and global uncertainty continue to burden the outlook. For now, the UK economy is caught between geopolitical trade moves and rising domestic costs, with limited room to gain any momentum.