GDP monthly estimate, UK: April 2025 + reactions

Thursday, 12 June 2025 07:45

Summary Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of and growth in the economy. Publications GDP monthly estimate, UK: April 2025 Chancellor of the Exchequer, Rachel Reeves Said: "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...Request free trial

Summary

Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of and growth in the economy.

Publications

GDP monthly estimate, UK: April 2025

Chancellor of the Exchequer, Rachel Reeves Said:

"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.

"In yesterday's spending review we set out how we'll deliver jobs and growth - whether that's improving city region transport, a record investment in affordable homes or funding Sizewell C nuclear power station. We're investing in Britain's renewal to make working people better off".

Conservative response to GDP figures

Mel Stride MP, Shadow Chancellor of the Exchequer, said:

“Before the election Labour promised "growth, growth, growth" but today's fall in GDP lays bare the disappointing consequences of Rachel Reeves' economic vandalism.

“Yesterday, the Chancellor should have taken corrective action to fix the problems she has caused. But instead her Spending Review has all but confirmed what many feared: more taxes are coming.

“Under Labour, we have seen taxes hiked, inflation almost double, unemployment rise, and growth fall. With more taxes coming, things will only get worse and hardworking people will pay the price.”

ENDS

Notes to Editors:

Higher taxes to service high spending is taking more money out of the pockets of working people. In the March 2025 Economic and Fiscal Outlook, Office for Budget Responsibility (OBR) said taxes would rise from 35.3 per cent of gross domestic product (GDP) to a ‘historic high' of 37.7 per cent in 2027-28 (OBR, Economic and Fiscal Outlook, 26 March 2025, link).

Paul Johnson, Director of the IFS, said Labour's choices mean they are ‘probably forced into a corner when it comes to tax increases'. Paul Johnson said there is a ‘50/50 chance' that the fiscal rules will be missed, meaning that Labour are ‘probably forced into a corner when it comes to tax increases' (PoliticsHome, 6 June 2025, link).

Ruth Gregory, Deputy Chief UK Economist at Capital Economics, said Labour's public sector pay increases mean ‘further tax rises in the Autumn Budget are starting to feel inevitable'. Ruth Gregory, an expert at Capital Economics, warned: ‘It's possible she could ask departments to make efficiency savings. But non-defence spending can only be cut so far and further tax rises in the Autumn Budget are starting to feel inevitable' (The Telegraph, 22 May 2025, link).

Sanjay Raja, Chief UK Economist at Deutsche Bank, said ‘tax rises look a near certainty' in the Autumn. Sanjay Raja said: ‘Undeniably, the Spending Review will likely leave the Chancellor with a tricky autumn Budget to navigate. Tax rises look a near certainty. And pressure to reform the Chancellor's [borrowing rules] will only increase from here on out' (The Telegraph, 30 May 2025, link).

Following the Spending Review, Rachel Reeves did not rule out further tax rises. STUDIO: So you can't say if taxes will go up in the autumn. REEVES: Well, taxes won't need to go up to pay for what is in this spending review. Now, I'm not going to write four years' worth of budgets within the first year of this government. But we took the action that was necessary last year to put our public finances on a firm footing and put that immediate injection of cash into our public services. And we've allocated the funding for day-to-day spending for the next three years and for capital spending for remainder of this Parliament. (GB News, 11 June 2025, archived)

Under Labour, the key economic indicators have deteriorated.

	July 2024	June 2025
Inflation	2.2 per cent	3.5 per cent (April 2025)	+1.3
Unemployment	4.1 per cent (Jun-Aug)	4.6 per cent (Feb-Apr 2025)	+0.5ppts
GDP Growth	1.4 per cent (Q1/Q2 2024)	0.8 per cent (Q4 24/Q1 25)	-0.6ppts
Borrowing costs (30yr)	4.689 per cent	5.350 per cent	+0.661ppts
Debt (PSND excl. banks)	94.8 per cent of GDP	95.5 per cent of GDP	+0.7 per cent

Responding to the latest GDP data, published by the ONS this morning, Stuart Morrison, Research Manager at the British Chambers of Commerce said: 

“With 0.7% growth in the 3 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 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.” 

IoD: Weak April data underscores need for business-focussed growth plan

Commenting on ONS data that showed GDP fell by 0.3% in April 2025, following 0.2% growth in GDP in March, Anna Leach, Chief Economist at the Institute of Directors, said:

“This is a disappointing number and one that incorporates a decline in service sector output for the first time since October 2024. But there are signs that the expiration of the stamp duty holiday in April may be exaggerating the downside surprise in the data. The ONS note that conveyancing and real estate both cited a significant impact from the policy. Meanwhile volatility around so-called “Liberation Day” tariffs may have left a mark too.

“As we head into the second half of the year, momentum from a strong Q1 should provide a bit of a tailwind to growth. But the broader supports to growth are rocky. On the consumer side, while balance sheets are strong and interest rates have come down, rising unemployment risks causing consumers to hit pause on purchases. Businesses report widespread caution in both the UK and globally as heightened uncertainty and the passthrough from a significant rise in the cost and risk of employment play through to sluggish demand. The Spending Review represents a decent allocation of revenues across public service delivery and infrastructure investment, but we await a more comprehensive plan for delivering the UK's economic renewal which has business at its heart.”

TUC - Spending Review will help economy continue to strengthen

Commenting on today's (Thursday) ONS figures, showing GDP falling 0.3% in April but rising 0.7% in the three months to April, TUC General Secretary Paul Nowak said:

“Despite a challenging international context, these figures show the economy continues to strengthen. Improving retail sales show growing consumer confidence and construction growth is also up. As the ONS report, some economic activity was brought forward to March, which has affected today's overall data.

“The Spending Review has provided an important foundation for future growth. Funding for key infrastructure projects will help deliver industrial revival, and much needed cash injections will start to fix our public services.

“The Bank of England must do its part too. We need further interest rate cuts soon to ease the pressure on household budgets and to make it more affordable for businesses to invest.”