In April 2025, the UK's business activity declined for the first time in 17 months, primarily due to the services sector contracting under the pressure of global trade tensions and domestic fiscal policies. The S&P Global UK Services PMI fell to 49.0, indicating contraction, as exports dropped at the fastest rate since February 2021. This downturn is attributed to the impact of global tariff implementations and increased domestic taxes, leading to higher operational costs and job cuts, especially among smaller firms.
Despite these challenges, the FTSE 100 index achieved a 16-day winning streak, reflecting investor optimism. Additionally, the UK and India finalized a significant trade agreement aimed at reducing tariffs on various goods, including a substantial cut in whisky and gin tariffs in India. This deal is expected to boost the UK economy by £25.5 billion annually by 2040.
In the corporate sector, Deliveroo accepted a £2.9 billion takeover offer from U.S. company DoorDash, marking a significant consolidation in the food delivery industry. The acquisition, pending shareholder approval, would result in Deliveroo's delisting from the London Stock Exchange.
These developments highlight the UK's complex economic landscape, where global trade dynamics and domestic policies significantly influence business activity and investor sentiment.
