The U.K.’s GDP fell sharply in April, reflecting the impact of U.S. President Donald Trump’s wide-ranging tariffs and the end of a tax break on property sales, official data showed today.
The U.K.’s monthly real gross domestic product (GDP) is estimated to have fallen by 0.3 percent in April 2025, following growth of 0.2 percent in March 2025 according to the Office for National Statistics. This marks the biggest monthly drop since October 2023.
Real estate sector impacts growth
A fall in real estate and legal activity in April after the end of a temporary tax break on house purchases contributed 0.2 percentage points of the 0.3 percentage point GDP fall in April, the U.K.’s statistics agency said.
There was an increase in Stamp Duty Land Tax (SDLT) rates in England and Northern Ireland on April 1. Residential Property Transactions data estimates that there was a monthly decrease of 63.5 percent in U.K. residential transactions in April 2025, compared with March 2025.
This followed a 61.6 percent rise in monthly U.K. residential transactions in March 2025 compared with February 2025. Monthly Business Survey comments suggested that the SDLT changes affected activity in April, most notably, conveyancing solicitors and real estate agencies saw a sizeable decline in April, as property purchases were completed ahead of the changes.
Car exports to U.S. fall amid tariff turmoil
Car makers also reported lower output and exports to both the United States and the European Union. The Society of Motor Manufacturers and Traders (SMMT) reported in their U.K. car and commercial vehicle manufacturing April 2025 publication that April’s decline was driven by a combination of factors, including model changeovers and lower demand in key export markets.
The statistics office also revealed that there was a negative GDP contribution at the subsector level from the U.K.’s information and communication in April 2025, which fell by 1.4 percent in the month. This was mainly driven by a 2.2 percent decrease in output in the computer programming, consultancy and related activities industry and a fall of 6.9 percent in the motion picture, video and TV program production, sound recording and music publishing industry.
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BoE to hold interest rates
The agency said the U.K.’s real GDP is estimated to have grown by 0.7 percent in the three months to April 2025, compared with the three months to January 2025, with signs that some activity may have been brought forward from April to earlier in the year.
This first quarter growth surpassed expansions in other Group of Seven countries, prompting the Bank of England to revise up its full-year growth forecast to 1 percent last month. However, the BoE revised down its growth forecast for 2026 to 1.25 percent and said it expected the tariffs to knock 0.3 percent off British output in three years’ time.
BoE policymakers, who are expected to hold interest rates next week, are faced with stubborn inflation and a relatively sluggish economy.
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