Due to higher corporate taxes, higher family costs, and a decline in exports to the US, the UK economy declined more than anticipated in April. The economy shrank by 0.3%, which was more than the 0.1% decline that experts had forecast.
The implementation of tariffs by US President Trump caused the most significant monthly decline in US exports on record in April, while employers’ National Insurance and water, electricity, and council tax rates all increased.
The numbers were released a day after chancellor Rachel Reeves unveiled spending measures meant to spur development, which included budget cuts elsewhere but boosts for the NHS and defence.
The UK government has made expanding the economy its top goal to raise living standards. In Wednesday’s Spending Review, Chancellor Rachel Reeves prioritised long-term investments over daily expenditures.
The most recent economic data were disappointing, she said. Still, she was “determined to deliver” growth. Reeves told the BBC that April was a “challenging month” for firms, with “a lot of uncertainty” because of the imposition of US tariffs.
The economy increased by 0.7% in the more steady three-month period ending in April, but monthly growth numbers can be erratic. She claimed the administration has subsequently reached trade accords with India and the European Union and a tariff arrangement with the United States.
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