The UK government has made growing the economy its main priority in an effort to boost living standards.
In her Spending Review on Wednesday, Reeves prioritised long-term investments over day-to-day spending.
She said the latest figures on the economy were “clearly disappointing” but added she was “determined to deliver” growth.
A poor month for the services sector, which includes businesses ranging from retail and hospitality to hairdressers and finance, was behind the contraction, along with manufacturing.
Legal firms and property companies also “fared badly”, the Office for National Statistics (ONS) said, following a strong March which saw many homebuyers rushing to complete purchases to avoid stamp duty hikes.
Car manufacturing performed poorly too after the introduction of 25% tariffs on vehicles being imported to the US. Cars are the UK’s biggest export to the US, with one in eight cars built in Britain sent to the US.
“After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States with decreases seen across most types of goods, following the recent introduction of tariffs,” said Liz McKeown, director of economic statistics at the ONS.
Monthly growth figures can be volatile and the more stable three-month figure to April showed the economy grew by 0.7%.
However, trade data also released on Thursday showed the value of UK exports decreased by some £2.7bn in April, with goods to America alone falling by £2bn.
