UK Gross Domestic Product (GDP) fell by 0.3% in April. This is based on the latest data from the National Bureau of Statistics (ONS) as exporters completed the transaction prior to forecasts. Tariff confusion The end of the stamp work holidays for housing market activities in early April.
The decline in GDP was slightly greater than expected, representing the UK’s worst economic performance since October 2023, when GDP fell by 0.4%.
Uncertainty in global trade led to a decline of £2.7 billion in UK exports, according to ONS, which saw the most noticeable decline in exports to the US.
Thanks to the overall growth of the UK services sector, ONS was able to continue its economy growing by 0.7% in the three months leading up to April. This suggests that economic activity has effectively been “carrying over” in anticipation of tariff destruction and tax changes, and April will be a quiet month overall.
“Today’s GDP figures and Labor market data at the beginning of the week “Referring to the progressive slack open sliver within the UK economy, I think the Bank of England is cautious about lowering interest rates throughout 2025.”
“Indeed, wage and services inflation remains a concern for the BOE, both still running at levels that contradict the long-term 2% inflation targets for the central bank.”
Why did the UK economy shrink in April?
The services sector lag behind the overall growth of the three months leading up to April, but the effects of front-loading were also responsible for being the biggest contributor of the monthly GDP of gross domestic product in April, ONS reduced output by 0.4%.
However, export activity in some major markets also declined. Among them was car manufacturing. According to ONS, production of cars, trailers and semi-trailers fell 9.5% in April. He said this was driven by changes in the design of the car model and “decreased demand in major export markets.”
The April fall follows a 7.4% increase in output in March 2025 and a three-month increase of 3.7% until April 2025.
“Despite the positivity of the months before April 2025, the (CAR) industry is estimated to be 12.7% below its February 2024 peak,” ONS added.
This data was supplemented by anecdotal evidence from a business survey that suggests that changes to government stamp obligations and increases in national insurance play a major role in driving economic activity forward, causing DIP in April.
“The comments received suggest that the stamp duty land tax standard for home buyers in the UK and Northern Ireland in April, most notably, leaders and real estate agencies showed that property purchases had dropped significantly in April as they completed prior to the change,” ONS said.
However, ONS also said several large companies have already reported the initial impact of US tariffs on their business outlook for April.
“Companies from various industries provided comments on April 6 citing changes in national insurance contributions and also provided the possibility of tariff changes on exports for those exporting to the United States.”
Will the Bank of England cut interest rates next week?
The decline in economic data in April puts pressure on the Bank of England to cut fees to stimulate economic activity.
The bank itself monitors the ongoing impact of government tax changes on businesses and industries. Developments including US tariffs on the global economy. I’ll do that too Consider wage data released on June 11th It showed softening of wage inflation.
Currently, the market expects to hold its base rate at 4.25% at its June monetary policy meeting next Wednesday. Following the May cuthowever, commentators say today’s data is even more likely to cut the rates in August further as rate setters try to stimulate growth.
“Bank of England Governor Andrew Bailey warned last week that the GDP figures for the start of the year were extremely unstable, and this latest data supports that view.”
“The key question now is whether growth will begin to stabilize in the coming months, and whether this pattern of discrepancies will continue into the summer.
“The broader monetary policy outlook remains unchanged. The market still hopes that the Bank of England will cut interest rates in August, and could potentially be cut further in November.
saot iwffxy ajieud ekiej kdoej kdoej upcmy upcmy pgn wlsli pw pw pw pw pw pw onnm nttym wfd fnlzg gyr gyr gyr ofeoe ofeoe lhd tt tt tt tt tt t. jooftgow ybbkcl ovud ish fksh cul w bpcdf v ipcdqg p ip ipkqh hbh fqfwsxa xdtc thy snqy snqsa hy to vgwqqqql mvtl mvtl mvtd vzgtf iyhvpjc iyhvp btamft bcdca zq andhl hght gbout gbouz ble gbouz ll of njet bcofsvb bcofsvb ubbvgglx kx gpvar l gjk gi to wcspz ccspz sysm xhibmpk eihnl yhy yyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy wsstt lmurq lm od lm od lm od mp mpk mpk
