With growth in reverse, trade tanking, and business confidence sagging, voters may be left wondering how long Labour can keep calling this chaos a “Plan for Change.”
Britain’s economy went into reverse in April – shrinking by a bruising 0.3 per cent – as Labour’s tax-hiking agenda took its toll after Rachel Reeves’s budget came into force.
The dismal figures from the Office for National Statistics (ONS) landed just 24 hours after the Chancellor delivered her grandly titled Spending Review.
Any hopes of a honeymoon period for Labour’s economic plans were crushed as the data confirmed what many had already warned: the UK is paying the price for a tax-heavy Budget that has rattled businesses and households alike.
While analysts had pencilled in a mild 0.1 per cent dip, the real figure came in at three times worse.
April was the first full month under Reeves’s new fiscal regime – with firms hit by a double whammy of National Insurance hikes and a bigger minimum wage bill. The timing couldn’t have been worse.
Shadow Treasury Minister Andrew Griffith slammed the results, saying:
“We said that April – the first month of this government’s tax hikes – would be awful and today that’s been confirmed: GDP down, Manufacturing output falling…Comes on top of rising unemployment and inflation.”
Adding fuel to the fire, across the pond, President Trump launched his so-called ‘liberation day’ tariff blitz – slapping import duties on global goods in a move that sent shockwaves through world trade. However, the UK was spared the worst of the tariffs, thanks to its ability to strike independent trade terms post-Brexit – one of dozens of documented Brexit dividends..
Liz McKeown, the ONS’s director of economic statistics, said:
“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.”
Yet despite the economic alarm bells, Reeves is sticking to her script.
The Chancellor said:
“Our number one mission is delivering growth to put more money in people’s pockets through our Plan for Change, and while these numbers are clearly disappointing, I’m determined to deliver on that mission.”
Critics aren’t buying it. The grim data has reignited fears of more tax hikes to come this autumn, with the government desperately trying to prop up public finances while pretending everything is under control.
Suren Thiru, of the Institute of Chartered Accountants in England and Wales, was blunt:
“These figures suggest that the UK’s economic fortunes took a notable nosedive in ‘Awful April’ as skyrocketing bill and tax rises, coupled with the chaos over US tariffs, suffocated overall output.”
“April’s decline is probably the start of a more sobering period for the UK economy with the damage from spiralling costs and intensifying global uncertainty set to slow growth sharply this quarter, despite elevated government spending.”
With growth in reverse, trade tanking, and business confidence sagging, voters may be left wondering how long Labour can keep calling this chaos a “Plan for Change” – and whether Reeves’s “number one mission” is already doomed.
