Britain’s economy shrank more than expected in April, with official figures released Thursday showing a 0.3% decline in gross domestic product (GDP) from the previous month — the sharpest contraction since October 2023.
The downturn, which outpaced economists’ forecasts of a 0.1% dip, came on the heels of 0.2% growth in March and broke a four-month streak of expansion.
According to the Office for National Statistics (ONS), the fall was driven by a steep drop in exports to the United States following the implementation of new American tariffs, as well as a slowdown in the housing sector after the expiry of a temporary property tax break.
“April saw the largest monthly fall on record in goods exports to the United States, with declines across most categories of goods,” said Liz McKeown, ONS Director of Economic Statistics.
The end of the homebuying tax incentive significantly affected real estate and legal services, accounting for two-thirds of April’s total economic contraction, the ONS reported. Meanwhile, automotive manufacturers cited declining output and weaker demand from both the US and EU markets.
Exports to the United States alone dropped by £2.0 billion ($2.7 billion) — the largest monthly decrease since records began in 1997.
The pound slid by a quarter of a cent against the US dollar in reaction to the disappointing figures.
Despite April’s setback, the UK economy had shown strong momentum earlier in the year, growing 0.7% in the first quarter of 2025 — the fastest pace among the G7 nations. That performance prompted the Bank of England last month to upgrade its annual growth forecast to 1%.
