Rachel Reeves has been dealt a fresh blow a day after her Spending Review with figures revealing the UK economy contracted by 0.3% in April. Forecasters had predicted a 0.1% dip but the figure, released by the Office for National Statistics on Thursday morning, is lower than expected amid tariffs and National Insurance hikes. It is also the worst fall since October 2023.

Shadow Chancellor Sir Mel Stride said: “Before the election Labour promised ‘growth, growth, growth’ but today’s fall in GDP lays bare the disappointing consequences of Rachel Reeves’ economic vandalism.

“Yesterday, the Chancellor should have taken corrective action to fix the problems she has caused. But instead her Spending Review has all but confirmed what many feared: more taxes are coming. Under Labour, we have seen taxes hiked, inflation almost double, unemployment rise, and growth fall. With more taxes coming, things will only get worse and hardworking people will pay the price.

The dip in April followed a stronger first three months of the year with growth of 0.7% in the first before Donald Trump‘s tariffs and NI increases struck.

Liberal Democrat Treasury spokeswoman Daisy Cooper MP said: “At the Spending Review yesterday, the Chancellor suggested that the country was on the up but today this claim has not survived contact with reality.

“Today’s figures should be a wake up call for the Government which has so far refused to listen to the small businesses struggling to cope with the jobs tax, worried that our high streets will be completely hollowed out and that our hospitality sector is hanging by a thread.

“To tackle Trump’s tariffs, Ministers must stop cowering in the corner and get on with building an economic coalition of the willing with our European and Commonwealth neighbours.

“It’s time for the Government to get serious, scrap their damaging jobs tax and go for growth with a bespoke UK-EU Customs Union that will raise billions to re-build our public services.”

Ms Reeves insisted her number one mission is “delivering growth to put more money in people’s pockets” through their plan for change.”

She contiued: “While these numbers are clearly disappointing, I’m determined to deliver on that mission.

“In yesterday’s spending review we set out how we’ll deliver jobs and growth – whether that’s improving city region transport, a record investment in affordable homes or funding Sizewell C nuclear power station. We’re investing in Britain’s renewal to make working people better off”.