UK economy grew more than expected in first three months of year

The UK’s financial system grew by greater than anticipated within the first three months of the yr, in keeping with the most recent official figures.

The financial system expanded by 0.7% within the January-to-March interval, which was stronger than the 0.6% that analysts had forecast.

The Workplace for Nationwide Statistics (ONS) mentioned development was largely pushed by the UK companies sector, though manufacturing additionally “grew considerably”.

The figures mark the interval simply earlier than the US imposed import tariffs and UK employer taxes elevated in April, and analysts warned the sturdy charge of development was unlikely to proceed.

Chancellor Rachel Reeves mentioned the most recent figures confirmed “the power and potential of the UK financial system”.

“Within the first three months of the yr, the UK financial system has grown sooner than the US, Canada, France, Italy and Germany,” she added.

However shadow chancellor Mel Stride identified that each the Workplace for Price range Duty and the Worldwide Financial Fund had downgraded the UK’s development forecast for this yr.

He additionally criticised the rise in employers’ Nationwide Insurance coverage funds, which got here into impact in April, calling it a “jobs tax”.

“Labour inherited the fastest-growing financial system within the G7, however their selections have put that progress in danger,” he mentioned.

Liberal Democrat Treasury spokesperson Daisy Cooper mentioned the information was “constructive information”, however there was “no time for complacency”.

The financial system grew by 0.2% in March, the ONS mentioned, which was additionally higher than the zero development that had been forecast.

Liz Martins, senior UK economist at HSBC, informed the BBC’s Right now programme she was feeling “fairly cheered” by the figures.

The financial system had grown strongly in February, which had been put down partly to firms ramping up output and exports forward of US tariffs.

However Ms Martins mentioned the most recent figures indicated development had been “pushed by the great things”.

“Enterprise funding is up almost 6% on the quarter and the service sector is doing nicely as nicely.

“So it isn’t simply producers promoting to the US to get forward of the tariffs.”

Nonetheless, Paul Dales at Capital Economics was extra sceptical, saying the most recent development “is likely to be pretty much as good because it will get for the yr”.

He mentioned the sturdy rise in GDP was “unlikely to be repeated as loads of it was because of exercise being introduced ahead forward of US tariffs and the rise in home companies taxes”.

Simon Pittaway, senior economist on the Decision Basis, additionally mentioned the expansion rebound was “unlikely to final, with knowledge for April wanting far weaker, and large tariff-shaped clouds hanging over the worldwide financial system”.