UK Chancellor Refuses to Rule Out Tax Increases After Economy Shrinks

The UK economy suffered its worst contraction for a year and a half in April, as taxes increased for businesses, household bills jumped and exports to the US plunged.

The economy shrank by 0.3 per cent, more than the 0.1 per cent predicted by experts, marking the steepest monthly decline since October 2023

April saw employers’ National Insurance and water, energy and council tax bills all rise, while the introduction of tariffs by President Trump led to the largest monthly fall on record in exports to the US.

The figures come a day after Chancellor Rachel Reeves set out spending plans aimed at boosting growth, with funding increases for the NHS and defence, but budgets squeezed elsewhere.

In the Spending Review, Reeves prioritised ploughing billions into long-term projects, in a bid to boost economic growth and improve living standards.