UK GDP Falls 0.3% as Forecast with No Room for Reeves

When GDP was reported up by 0.7% in the 1^st quarter 2025, Rachel Reeves claimed success but we wrote at the time “We suggest this is close, we expect a slowdown in GDP despite no doubt, the Labour government will be claiming success”.  We suggested a stamped ahead of stamp duty increases but then we forecast interest rates would be frozen, and they were.  We also suggested that Trump tariffs had yet to impact on both the UK and global economies as well as National Minimum Wage increases and employers national insurance contribution increases had not hit yet.

Today, it was confirmed by the Office for National Statistics (ONS) that GDP had fallen for February to April by 0.3% pa, for all of the above reasons.

Comment

The above noted and we are sorry but “we told you so”, Mrs Reeves is still pushing on with spending and is yet to increase taxes yet they will come again in the Autumn Budget.  This is also despite unemployment also now rising again.

Next week, it is the turn of the ONS reporting on inflation on Wednesday and then the Bank of England to confirm any interest rate changes on Thursday.  We do not hold out much hope for rate cuts just yet and suggest there may be no ‘wiggle room’ until the end of Summer.