UK Economy Shrinks in April as a Result of U.S. Tariffs

The UK economy experienced a sharp contraction in April 2025, reflecting the economic shockwaves caused by the recent decision by U.S. President Donald Trump to impose broad tariffs on imported goods. This marked the most significant monthly decline in GDP since October 2023.

According to data released by the UK’s Office for National Statistics (ONS), the gross domestic product (GDP) shrank by 0.3% in April compared to March. This decline exceeded analysts’ expectations, which had projected a modest drop of 0.1%, following a 0.2% growth in March.

Liz McKeown, Director of Economic Statistics at the ONS, stated, “After growth over the previous four months, April saw the steepest monthly drop ever in UK goods exports to the United States, with declines seen across most categories due to the recent tariffs.”

The report highlighted that the real estate and legal sectors also contracted in April, contributing 0.2 percentage points to the overall 0.3% decline. This was largely due to the end of a temporary tax relief scheme for homebuyers. Additionally, car manufacturers reported a fall in both output and exports to the U.S. and the European Union.

In the first quarter of 2025, the UK economy had expanded by 0.7%, outperforming most other G7 nations. This robust performance had led the Bank of England to revise its annual growth forecast upward to 1% last month.

However, the central bank lowered its 2026 growth projection to 1.25%, warning that the newly imposed tariffs are expected to reduce the UK’s GDP by 0.3% over the next three years.

The latest data suggest that the UK economy is beginning to feel the pressure of international trade tensions, particularly with the United States. While early-year growth was strong, external risks may hinder the recovery momentum.