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LONDON (Reuters) - Britain's economy unexpectedly grew in March to push up output over the first quarter of 2025 by the most in a year, according to official data on Thursday that will be welcomed by finance minister Rachel Reeves.

Gross domestic product expanded by 0.2% in March from February. Economists polled by Reuters had mostly expected a flat reading of 0.0%.

Between January and March, gross domestic product grew by 0.7%, the Office for National Statistics said. That was above the 0.6% growth forecast in the Reuters poll and which had also been expected by the Bank of England.

The ONS said growth was largely driven by the services sector although production grew significantly too after a period of decline. Business investment grew strongly.

"Today's growth figures show the strength and potential of the UK economy," Reeves said in a statement. "In the first three months of the year, the UK economy has grown faster than the US, Canada, France, Italy and Germany."

She and Prime Minister Keir Starmer are trying to kickstart Britain's sluggish economy via increased spending on infrastructure and other reforms that they hope will boost investment.

However, the BoE said last week it expected the growth jump in the January-to-March period would prove temporary with output likely to expand by 1% this year, speeding up only slightly to 1.5% growth in 2027.

U.S. President Donald Trump's trade tariffs are expected to slow the global economy while British businesses have said they will be hit by big rises in employment taxes ordered by Reeves and in the minimum wage.

So far, Britain's consumers have remained largely unfazed by worries about the outlook for the economy. Data published this week showed a rise in their spending over March and April.

(Writing by William Schomberg; Editing by Muvija M and Suban Abdulla)