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UK's economy shrinks more than expected, Trump's trade war hits it hard
Cargo is loaded onto the container ship MH Perseus, following its arrival from New Orleans, U.S., at the Port of Southampton, Southampton, Britain, April 3, 2025. Source: Reuters
The UK economy contracted by 0.3 per cent in April, more than what experts and economists expected as taxes rose and exports to US nosedived.
Businesses scaled back investment plans and slashed jobs, pushing the economy into reverse.
Earlier, economists predicted 0.1 per cent contraction.
The latest figure from the Office for National Statistics reveals that it's the worst monthly drop since October 2023, following positive growth rate of 0.2 per cent and 0.5 per cent in March and February, respectively.
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Trump's tariff war bites
Economists earlier predicted that US President Donald Trump's 'liberation day' tariffs were expected to hit UK exports to the world's largest economy.
'After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States with decreases seen across most types of goods, following the recent introduction of tariffs,' Liz McKeown, an ONS director of economic statistics, was quoted as saying by the Guardian.
In the same period, manufacturing dropped by 0.6 per cent, mainly due to cuts in auto industry output. The UK's auto sector suffered mainly because of the US 25 per cent levy on auto imports.
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