UK economy shrank in April as tax rises and US tariffs kicked in

The UK economy suffered its worst contraction in almost two years in April as taxes increased for businesses, household bills jumped and exports to the US plunged.

The economy shrank by 0.3%, more than the 0.1% fall predicted by experts – marking the steepest monthly decline since October 2023

In April, employers’ National Insurance and water, energy and council tax bills all rose, while the introduction of tariffs by President Trump led to the largest monthly fall on record in exports to the US.

The figures come a day after Chancellor Rachel Reeves set out spending plans aimed at boosting growth, with funding increases for the NHS and defence, but budgets squeezed elsewhere.

The UK government has made growing the economy its main priority…