Commenting on the latest ONS GDP data, Adam Deasy, Economist at PwC, says:
“The growth momentum built up in Q1 2025 seems to be coming undone, with UK economic activity decreasing by 0.3% month-on-month in April. The growth rebound in Q1 was unlikely to last, due to higher NICs, US trade tariffs, and Stamp Duty changes all coming into force in April. Nevertheless, this drop represents a larger-than-expected reversal in growth.
“A drop in services output of 0.4% was the biggest contributor, with Stamp Duty changes causing a sharp reduction in housebuying activities and legal services. Significant falls in wholesale retail and manufacturing illustrate the impact of other external economic headwinds.
“Many of the spending priorities announced by Chancellor Rachel Reeves yesterday will take time to bear ‘growth-shaped’ fruit. The question is whether the UK economy will pick up steam in the meantime. Today’s data, a weakening labour market, and worsening business sentiment point to a slowing growth outlook in the near-term and strengthen the case for further rate cuts from the Bank of England.”
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