The UK economy contracted by 0.3% in April 2025, marking its sharpest monthly decline since October 2023 and exceeding economists' expectations of a 0.1% drop. This downturn was primarily driven by a significant fall in goods exports to the US, likely in anticipation of new tariffs introduced by President Trump's administration. Additionally, the expiration of a property tax break adversely affected service sectors such as real estate and legal services. Households also faced increased national insurance contributions and rising utility bills, further dampening economic activity. The services sector, which constitutes a substantial portion of the UK economy, shrank by 0.4%, highlighting broader economic vulnerabilities. In response to these challenges, the Bank of England, having already reduced interest rates four times since last summer, is anticipated to implement further cuts amid rising unemployment and slowing growth. Market reactions included a modest dip in the pound and a decline in gilt yields, reflecting changing interest rate expectations.