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Rachel Reeves said tariffs were to blame for her latest blunder (Image: Getty/Alamy)
Rachel Reeves has appeared to blame Donald Trump after GDP fell by 0.3% in April. The Chancellor said "huge uncertainty about tariffs" had hit the UK economy hard.
The US President sent markets into a spin earlier this year as he announced a series of tariffs on key imports and exports. The tariffs were largely directed at China and other competitors, but UK exports were still impacted. The Chancellor admitted April was a "challenging month" as she appeared to blame the fall on Mr Trump's controversial policy.
Donald Trump unveiled sweeping tariffs in his so-called 'Liberation Day' on April 2 (Image: Getty)
Ms Reeves told Sky News: "There was a huge uncertainty about tariffs, and one of the things, if you dig into those GDP numbers today, is exports weakening and also production weakening because of that uncertainty in the world around tariffs."
She also accepted that the latest stats were "disappointing" but went on to claim the slump in GDP was "not entirely unexpected."
The economy experienced its biggest monthly contraction in 18 months April after a sharp decline in manufacturing activity amid a record drop exports to the US in the wake of the tariff hikes.
Rachel Reeves' spending review on Wednesday has sparked concerns of future tax hikes (Image: Getty)
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Official figures from the Office for National Statistics show GDP dropped by 0.3% in April following a growth of 0.2% in March, representing the biggest contraction since October 2023.
Many economists had predicted a 0.1% contraction.
The ONS said output in Britain’s manufacturing sector dropped by 0.6% in April, having surged earlier in the year as US importers stocked up ahead of Mr Trump’s tariff rises, which came into effect at the start of April.
Exports to the US fell at a record rate in the month, down £2 billion — led by machinery and transport, including cars, according to separate trade figures from the ONS on Thursday.
ONS director of economic statistics Liz McKeown said: “After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the US with decreases seen across most types of goods, following the recent introduction of tariffs.”
The wider economy also shrank as the services sector saw activity fall by by 0.4% in April.
The new GDP figures are "clearly disappointing", according to Rachel Reeves (Image: Getty)
The ONS said this was largely pulled lower by a drop off in demand in the housing market following the rush to complete property deals ahead of the stamp duty change from April 1.
Ms Reeves said the new GDP figures were "clearly disappointing" but said her Spending Review — unveiled on Wednesday — would help deliver growth.
“Our number one mission is delivering growth to put more money in people’s pockets through our plan for change, and while these numbers are clearly disappointing, I’m determined to deliver on that mission,” she said.
It comes days after it was revealed the UK's unemployment rate has hit a nearly four-year high.
Political opponents blamed the figures on Ms Reeves' "jobs tax".
The increase in national insurance contributions and minimum wage which came into effect in early April has hit the service sector particularly hard.
Ms McKeown said declining output in services and manufacturing sectors both dragged on overall GDP in April.
Mr Trump introduced his so-called 'reciprocal tarrifs' at the start of the month, sparking chaos in the global markets.
The UK has since struck a deal meaning British exports will avoid the worst of the trade duties.
There is a baseline tariff of 10% and there are exemptions for certain key goods, like steel.
English (US) · 