Ryan FowlerThe UK economy contracted by 0.3% in April 2025, following 0.2% growth in March, driven by a broad-based decline in the services sector, which fell by 0.4%. New data from the Office for National Statistics shows that GDP grew by 0.7% over the three months to April, but the monthly decline signals the ongoing impact of fiscal and trade changes on professional services.
The steepest drop within services came from the professional, scientific and technical activities subsector, where output declined by 2.4%. Legal activities were particularly affected, falling by 10.2% in April following changes to stamp duty land tax (SDLT) in England and Northern Ireland that prompted a pull-forward in property transactions to March. Real estate activities on a fee or contract basis fell by 6.5% for the same reason.
Administrative and support service activities bucked the trend, growing 1.6% in April, driven by a 3.6% increase in rental and leasing and a 2.1% rise in office administrative and support services. However, information and communication output dropped by 1.4%, including a 6.9% fall in motion picture and broadcasting activity and a 2.2% decline in computer programming and consultancy.
Liz McKeown, director of economic statistics at the ONS, said: “After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States with decreases seen across most types of goods, following the recent introduction of tariffs.”
Wider survey responses also cited higher National Insurance costs and broader staffing pressures, with 77% of businesses with 10 or more employees reporting increased staffing costs in the previous three months.
