UK economy expands at fastest pace in a year
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The news: UK GDP expanded at the fastest clip in 12 months, with data ahead of tax hikes and Donald Trump’s trade tariffs showing growth accelerated from the end of 2024.
The numbers: Gross domestic product rose 0.7% in Q1, up 0.1% on the previous quarter and above the 0.6% expected by the Bank of England. Real GDP is estimated to have increased by 1.3%, compared with the same quarter a year ago.
In output terms, growth in the three months to March was driven by an increase of 0.7% in the services sector while production also grew by 1.1%. The construction sector showed no growth.
The FTSE 100 rose 0.05% by mid-morning in London on Thursday, remaining largely unchanged on the news.
The context: The UK’s Labour government says growth remains its key priority, although some critics argue it is slowing down the economy with measures such as an increase in employers’ national insurance contributions introduced in April. These measures, alongside the impact of US President Donald Trump’s trade tariffs are expected to become apparent from the Q2 GDP read.
Prime Minister Sir Keir Starmer said that the first-quarter expansion is “very good for working people across the country”, adding that the strong GDP figures demonstrate “the strength and resilience of the British economy”.
The sources: Office for National Statistics, Reuters
