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    Home»Property»UK economy slows more than expected as GDP falls 0.3%
    Property

    UK economy slows more than expected as GDP falls 0.3%

    June 12, 20252 Mins Read


    The UK economy shrunk by 0.3 per cent in April, latest data from the ONS shows.

    It was the biggest drop in GDP since October 2023 and follows growth of 0.2 per cent in March.

    The largest contributor to the fall was a drop in monthly services output of 0.4 per cent.

    This was mainly driven by a 10 per cent drop in legal activities, linked to a drop in property services and therefore use of conveyancing solicitors.

    Nicholas Hyett, investment manager at Wealth Club said: “The UK economy is facing a cocktail of headwinds to growth, and slowed more than expected in April as a result.

    I”n the very short term the change to stamp duty rules have put the legal and property services on ice.

    “New barriers to trade with the US and changes to employment costs, from a higher living wage and increased national insurance contributions, are a longer term challenge.

    “It looks like work was pulled forward to earlier in the year to avoid those headwinds and as a result we’re now seeing the inevitable economic hangover.”

    Hyett added that a shrinking economy struggles to deliver the tax revenues needed to deliver on the chancellor’s spending review commitments.

    Felix Feather, economist at Aberdeen, said GDP was even weaker than the 0.1 per cent contraction expected.


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    He said: “This weakness follows surprisingly sharp expansions earlier in the year, and so in part likely represents some payback for the past strength.

    “In addition, pessimism and uncertainty arising from US tariff policy probably weighed on the economy. The increase to employer national insurance contributions prompted the labour market to cool over the same period, compounding the headwinds.”

    Lindsay James, investment strategist at Quilter, said: “While the economy still grew by 0.7 per cent in the three months to April compared with the previous quarter, the monthly figure may be indicative of more difficulty to come.

    “The data will come as a blow to Rachel Reeves – albeit a somewhat expected one – having just yesterday delivered her spending review which promised considerable spending. While the Chancellor laid out her plans to spend yesterday, it was unclear where any cuts would be coming from.”

    tara.o’connor@ft.com

    What’s your view?

    Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com



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