Market News
UK economy grew faster than expected to 0.7% in first quarter of year ahead of Trump tariffs - THE INDEPENDENT
Athena Stavrou
The UK economy grew by 0.7 per cent between January and March, new official figures show.
Gross Domestic Product (GDP) grew faster than expected and at the fastest rate in a year over the first quarter of 2025, according to the Office for National Statistics.
The figures mark a boost to Chancellor Rachel Reeves, who said the growth figures showed the Government was “making the right choices” but acknowledged “there is more to do”.
“Today’s growth figures show the strength and potential of the UK economy,” she said.
“In the first three months of the year, the UK economy has grown faster than the US, Canada, France, Italy and Germany. Up against a backdrop of global uncertainty we are making the right choices now in the national interest.”
She added: “Our plan for change is working. But I know there is more to do and that is why I’m determined we go further and faster to make working people better off.”
The 0.7 per cent growth means it came in ahead of economists’ expectations of 0.6 per cent growth for the quarter.
It was also the highest GDP rate since the first quarter of 2024, when the economy jumped by 0.9 per cent.
Economists at the Confederation of British Industry (CBI) said the rise in activity was “a pleasant surprise”, but warned the strength of GDP over Q1 is “likely to prove a one-off”.
“An up-tick in inflation and a cooling labour market will see real household income growth slow this year, though lower interest rates should encourage consumers to save less and spend more,” Ben Jones, lead economist at CBI said.
“Businesses remain cautious over hiring and investment plans given the steep rise in employment costs following the Autumn Budget. And the uncertain global economic backdrop is hardly conducive for long-term planning.
“Now is a critical time for government to hardwire growth into the economy through the upcoming Spending Review.”
