The British economic system grew at its quickest price in a yr throughout the first quarter of 2025, official figures confirmed Thursday, in a fine addition to the Labour authorities, which has made lifting the nation’s progress its prime precedence.
The Workplace for Nationwide Statistics mentioned progress, as measured by gross home product, elevated by 0.7% within the first quarter of the yr from the ultimate three months of 2024, with the nation’s dominant companies sector doing notably properly.
The primary quarter improve makes the British economic system the fastest-growing among the many Group of Seven main industrial nations.
Development was modestly forward of market expectations for a 0.6% improve. It was additionally the most important improve because the first quarter of 2024, when the economic system expanded by 0.9%.
Treasury chief Rachel Reeves welcomed the expansion leap, and mentioned the figures confirmed the alternatives made by Labour because it was elected final July have been starting to repay.
“We’re set to be the quickest rising economic system within the G-7 within the first three months of this yr and that is extremely welcome, however I do know that there’s extra to do,” she mentioned whereas on a go to to a Rolls-Royce manufacturing facility in Derby, northern England.
Most economists assume it’s more likely to decelerate within the second quarter of the yr, partly due to the worldwide uncertainty generated by US President Donald Trump’s tariff insurance policies.
Although most tariffs have been paused for 90 days following the following market turmoil, together with the ten% baseline tariff utilized to UK items getting into the US, the backdrop for the worldwide economic system stays extremely unsure, notably if the US-China commerce conflict persists.
A few of that uncertainty, in regards to the British economic system, was lifted on Thursday when each Trump and British Prime Minister Keir Starmer individually outlined particulars of a commerce deal between the US and the UK. Although Trump saved the ten% baseline tariffs on the UK, he agreed to cut back the levies on British autos, metal and aluminium.
Sanjay Raja, chief UK economist at Deutsche Financial institution, mentioned the expansion uptick will seemingly be short-lived, particularly throughout the second quarter when commerce uncertainty can be at its peak.
“Exporters will seemingly see diminished demand as properly from increased US tariffs and weaker world demand,” he mentioned.
Economists mentioned progress will seemingly falter within the second quarter as new taxes on companies have been imposed in April. Additionally, a raft of value rises throughout the month, together with home vitality and water payments, are anticipated to maintain a lid on shopper demand.