Official data show that the UK's economic growth rate exceeded expectations in the first quarter of 2025.
The National Bureau of Statistics (ONS) said gross domestic product (GDP) is a standard measure of economic value, up 0.7% in the first quarter of 2025.
Before the market estimates of 0.6% and 0.1% growth recorded during Christmas period, it was significantly improved.
Services (+0.7%) and production (+1.1%) are both growing, while construction (0.0%) is flat.
Liz McKeown, director of economic statistics at ONS, explained that the growth in services, retail and computer programming all have “strong quarters” as well as car rental and advertising.
“In the year, the economy grew significantly in most parts of the year, and for a period of time, the economy grew significantly due to service-driven,” McKean said.
Every year, it is estimated that Real UK GDP is estimated to increase by 1.3% compared to the same quarter a year ago.
In March, GDP expanded by 0.2%, also surpassing expectations. The one-month forecast has not grown at all.
Prime Minister Rachel Reeves said: “Today’s growth data show the strength and potential of the UK economy.
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“In the first three months of this year, the UK’s economy grew faster than the United States, Canada, France, Italy and Germany.
“In the context of global uncertainty, we are making the right choice for the national interest. As the election has already carried out four lower interest rates, signed two trade deals, saved British steel and rose to millions by raising the minimum wage.
“Our plan for change is working. But I know there is more to do, which is why I'm sure we're going further and making workers better soon.”
The 0.7% growth in the UK in Q1 2025 shows that this is the fastest-growing economy for the G7 in the previous quarter.
The euro zone grew 0.4% in the last quarter, and the U.S. GDP was slightly signed due to President Donald Trump's trade war.
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Lindsay James, investment strategist at Quilter, said: “This strong performance will provide guarantees for policy makers, especially shortly after the Bank of England cut the first time this cycle to 4.25%, although today's data does not fundamentally shift the economy.
“However, there are challenges. Obviously, some sources of strength can be attributed to changes such as the threshold for stamp duty land tax, which brings the purchase.
“In addition, the UK-US trade agreement signed earlier this month, while politically consistent, is unlikely to bring direct economic dividends. While tariffs on selected commodities such as steel and auto parts have been eased, 10% responsibilities remain on many other exports, and concerns have emerged, and such deals may excite British relations, especially around sensitive technology.”
The UK has seen quarterly growth of 0.7% since the recession in early 2024.
“Looking forward, despite the first quarter growth, there is still some uncertainty. So far, the increase in national insurance business has not been shown in labor market data.
“Electually, manufacturing and services PMI has been slowing throughout the quarter. In addition to the consequences of recent tariff announcements, this slowdown could bring headwinds in the second quarter, which could lead to economic growth in the UK.”
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The latest data came ahead of new tariffs announced by U.S. President Donald Trump, which includes 10% tariffs for imports from the UK. While some measures have been reduced since then, economists warn that trade actions could impact global growth in the coming quarter.
JRF Director of Insights and Policy Alfie Stirling said: “As the Prime Minister pointed out, the family economic experience is not about experiencing the economy in terms of percentage of GDP, but rather the pounds through its pockets. A parliamentary term is worse than family, and worse than local competition this month, it will be a tough record in the place this month.
It is estimated that real GDP grew by 0.5% in the first three months of 2025 after two consecutive quarterly declines.
“The UK's GDP figures are better than expected with the turbulent tariffs, which shows that the economy has shown that the economy has been able to navigate to calm waters so far,” said Isaac Stell, investment manager at Fortune Club.
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