Cliff Notes
- UK GDP growth slowed to 0.3% in the three months to June, impacted by US tariffs and rising business costs.
- This growth was stronger than expected, with economists anticipating only 0.1%, thanks in part to a strong June performance.
- Higher costs for households and employers, due to increased energy bills and national insurance contributions, have contributed to inflationary pressures.
UK growth slows as Economy feels effect of higher business costs
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UK economic growth slowed as US President Donald Trump‘s tariffs hit and businesses grappled with higher costs, official figures show.
A measure of everything produced in the economy, gross domestic product (GDP), expanded just 0.3% in the three months to June, according to the Office for National Statistics (ONS).
It’s a slowdown from the first three months of the year when businesses rushed to prepare for Mr Trump’s taxes on imports, and GDP rose 0.7%.
But it’s also a stronger showing than expected and relatively welcome news for Chancellor Rachel Reeves, whose government has staked its success on growing the economy. Economists polled by Reuters had only anticipated GDP expansion of 0.1% across April to June.
The figure was better than anticipated after a strong June. Across the month, GDP rose 0.4%, surprising observers.
Caution from customers and higher costs for employers, however, led to the lower growth reading up to June rather than the previous quarter.
Economic activity in April and May, in particular, was weak as purchases were brought forward to early in the year ahead of the stamp duty change and tariff changes.
Costs rose for households as energy, water and council tax bills rose, leading to higher inflation overall.
Employers were hit with higher costs in the form of higher national insurance contributions and increased minimum wages.
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