The economy unexpectedly shrank by 0.3% after taxes increased for businesses, household bills jumped and exports to the US plunged, according to the latest figures from the Office for National Statistics.
The fall in the UK’s gross domestic product (GDP) – a key measure of the economy – was worse than expected in April, with experts predicting it would shrink by 0.1% between March and April.
Stuart Morrison, Research Manager at the British Chambers of Commerce, said: “With 0.7% growth in the three months to April, the UK economy enjoyed a strong start to the year as firms increased trade ahead of the volatility of tariff announcements. 
“However, a larger than expected fall in UK GDP for April suggests the UK is now turning more squarely into headwinds.
“The UK’s partial trade deal with the US has offered some relief, but the lowering of tariffs on steel, aluminium and automotives is not yet fully assured.
“This continued uncertainty will inevitably hamper firms’ investment decisions and long-term growth prospects.
“Our research also shows 82% of firms think the National Insurance rise will impact their operations – hitting investment, recruitment and prices.
“While yesterday’s spending review offered some welcome investment in infrastructure, which will benefit supply chains, businesses will be keen to see further action from government.
“A clear tax roadmap, covering national insurance and business rates, would give them some certainty to plan for the future.
“Additionally, a timeline for when they might see practical changes to UK-EU trading arrangements would also be very welcome by firms navigating ongoing trade uncertainties.”
More detail on the ONS data can be found here.
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