In April, the UK's GDP shrank more than expected, with exports to the US falling sharply due to tariff impacts.

The UK's economic output in April plummeted sharply, reflecting the impact of US President Trump's announcement of widespread tariffs and the end of tax breaks in real estate transactions. Data released on Thursday showed that the UK's GDP in April fell by 0.3% compared to the previous month, the largest monthly decline since October 2023, worse than the economist-expected decline of 0.1%, while GDP in March rose by 0.2% compared to the previous month. Liz McKeown, director of economic statistics at the UK National Statistics Office, said, "After four consecutive months of growth, April set a record for the largest single-month decline in US goods exports, with most types of goods exports declining, which is related to the recent implementation of tariffs." Data shows that the UK's goods exports to the US in April fell by 2 billion (approximately $2.7 billion), the largest monthly drop since records began in 1997. The UK National Statistics Office revealed that industrial output in April significantly declined, reversing the trend of high production growth earlier in the year due to expectation for US importers to stockpile before the implementation of tariffs, and the decline in exports to the US confirms the impact of actual tariffs. The statistical department emphasized that trade policy uncertainty and tariff measures have had a substantial negative impact on the UK economy. The UK National Statistics Office stated that the decline in real estate and legal activities contributed to 0.2 percentage points of the 0.3% monthly decline in the UK's economic output in April. The country's car manufacturers also reported declines in production and exports to the US and EU. The UK's GDP grew by 0.7% in the first quarter, outperforming the growth of other developed economies in the Group of Seven (G7), prompting the UK central bank to raise its forecast for full-year economic growth in 2025 to 1% last month. However, at the same time, the Bank of England lowered its forecast for economic growth in 2026 to 1.25% while stating it expects tariffs to reduce the UK's economic output by 0.3% over the next three years. It is worth noting that data released last month showed a significant increase in inflation in the UK, with the Consumer Price Index (CPI) rising from 2.6% in March to 3.5% in April, the highest level since January 2024; the core CPI excluding energy, food, alcohol, and tobacco prices also rose from 3.4% in March to 3.8%. The sharp rise in prices in April in the UK was mainly driven by increases in prices of energy, water, broadband, and TV subscription fees. Under the double pressure of stubborn inflation and weakened economic momentum, the market generally expects the Bank of England to maintain interest rates at the upcoming monetary policy meeting next week. Following the release of the UK's GDP data for April, Chancellor Rishi Sunak stated that the GDP data was "disappointing" and expressed his determination to promote economic growth. It is reported that on June 11, Rishi Sunak announced the first comprehensive fiscal expenditure review since the Labour government came to power, proposing substantial increases in fiscal investment in key areas such as the national health service, defense, housing, and local infrastructure in the coming years. The UK government stated that this move aimed to promote a "comprehensive renewal" of the country and address long-standing issues.