The UK economy shrank by 0.1% in April 2026. It was the first monthly contraction since August 2025, according to the Office for National Statistics. In February and March this year, GDP grew by 0.4% and 0.3%, respectively.
Economists say that in April the fallout from the Iran war and the blocking of the Strait of Hormuz started to become evident. The main driver of the fall came from the services sector, which declined by 0.2%, despite a rise of 0.1% in construction. Production remained unchanged.
Reuters quotes an Office for National Statistics official who said there had been cancellations of sporting events in the Middle East which had affected British firms. Two examples are the Formula 1 Grand Prix cancellations in Saudi Arabia and Bahrain. Tennis and football (soccer) events had also been suspended or cancelled.
Bad month, promising quarter
When calculated over one quarter, that is, the three months leading up to the end of April 2026, GDP grew by 0.7% compared to the same period in 2025. This compares with -0.1% in France, 0.3% in Germany, 0.2% in Italy, -0.1% in the European Union, and 0.5% in the United States. Please note that in the other countries, the three-month period was January, February, and March.
The UK economy has been growing for five consecutive quarters, which compares favourably with several other G7 nations.
As far as economists are concerned, quarterly trends matter more than a single month’s performance. Monthly figures can be affected by unusually bad weather, industrial action (strikes), and other temporary factors.
April’s temporary setback, when seen within the context of the stronger three-month period, does not seem so bad.
Many economists and consultancy employees believe that the UK’s outlook will worsen. Political uncertainty, high interest rates, and more expensive fuel are most likely to bring the economy to a standstill. The Bank of England is unlikely to cut interest rates, most people in the City of London believe.
International trade
In a separate report, the Office for National Statistics reported that the value of fuel imports rose sharply in April to £7.1 billion ($9.52 billion), reaching its highest level in three years.
The total value of all goods imported in April grew by £0.8 billion (US$1.07 billion), or 1.5%. Imports from EU countries increased while non-EU imports were down. Exports rose by £0.8 billion (US$1.07 billion), or 2.6%, with increases to both non-EU and EU nations.
The UK’s trade deficit widened by £7.7 billion (US$10.32 billion) to £9.9 billion (US$13.27 billion) in the quarter ending in April 2026 compared with the previous quarter.
