Businesses face mounting pressure as UK GDP falls 0.1%

The UK economy contracted by 0.1% in April, according to the latest figures from the Office for National Statistics (ONS), marking the first monthly decline since August 2025 and reflecting growing pressure from higher energy costs and geopolitical uncertainty.

The fall followed growth of 0.3% in March and 0.4% in February, with services output declining by 0.2% during the month. Production output was flat, while construction activity increased by 0.1%.

Despite the monthly setback, GDP grew by 0.7% in the three months to April, extending a run of five consecutive rolling quarterly increases.

Neil Rudge, chief banking officer at Shawbrook, said: “Today’s figures show that the geopolitical climate is beginning to feed through into the domestic economy, with GDP falling by 0.1% in April following the surprising growth we saw last month.

“Rising oil and gas prices, combined with ongoing supply chain disruption, are creating real headaches for businesses, particularly those with a heavier reliance on international trade.

“With uncertainty showing no signs of easing, the businesses best placed to weather this will be those that take a hard look at their costs and plan ahead.

“External funding has a real part to play here, giving SMEs the flexibility to manage pressures and keep pushing forward with their growth plans even in tougher times.”

The ONS noted that businesses across a range of sectors reported the impact of the conflict in the Middle East, particularly through higher fuel and energy costs.