UK economy shrunk in April as tax rises kicked in

The UK economy shrunk by more than expected in April as tax increases kicked in for employers and British exporters faced huge uncertainty over US trade tariffs.

The economy contracted by 0.3%, with the services sector being particularly hard hit. Economists had predicted a 0.1% fall.

In April, employers' National Insurance rose while energy, water and council tax bills increased for households.

The figures come after a day after chancellor Rachel Reeves set out spending plans aimed at boosting growth, with funding increases for the NHS and defence, but budgets squeezed elsewhere.