UK becomes fastest-growing G7 economy after strong first quarter

The British system grew astatine its fastest complaint successful a twelvemonth during nan first 4th of 2025, charismatic figures showed Thursday, successful a invited boost to nan Labour government, which has made lifting nan country's maturation its apical priority.

The Office for National Statistics said growth, arsenic measured by gross home product, accrued by 0.7% successful nan first 4th of nan twelvemonth from nan last 3 months of 2024, pinch nan country's ascendant services assemblage doing peculiarly well.

The first 4th summation makes nan British system nan fastest-growing among nan Group of Seven starring business nations.

Growth was modestly up of marketplace expectations for a 0.6% increase. It was besides nan biggest summation since nan first 4th of 2024, erstwhile nan system expanded by 0.9%.

Treasury main Rachel Reeves welcomed nan maturation leap, and said nan figures showed nan choices made by Labour since it was elected past July were opening to salary off.

"We're group to beryllium nan fastest increasing system successful nan G-7 successful nan first 3 months of this twelvemonth and that's incredibly welcome, but I cognize that location is much to do," she said while connected a sojourn to a Rolls-Royce mill successful Derby, bluish England.

Most economists deliberation it is apt to slow down successful nan 2nd 4th of nan year, partially because of nan world uncertainty generated by US President Donald Trump's tariff policies.

Though astir tariffs were paused for 90 days pursuing nan ensuing marketplace turmoil, including nan 10% baseline tariff applied to UK equipment entering nan US, nan backdrop for nan world system remains highly uncertain, peculiarly if nan US-China waste and acquisition warfare persists.

Some of that uncertainty, concerning nan British economy, was lifted connected Thursday erstwhile some Trump and British Prime Minister Keir Starmer separately outlined specifications of a waste and acquisition woody betwixt nan US and nan UK. Though Trump kept nan 10% baseline tariffs connected nan UK, he agreed to trim nan levies connected British autos, alloy and aluminium.

Sanjay Raja, main UK economist astatine Deutsche Bank, said nan maturation uptick will apt beryllium short-lived, particularly during nan 2nd 4th erstwhile waste and acquisition uncertainty will beryllium astatine its peak.

"Exporters will apt spot reduced request arsenic good from higher US tariffs and weaker world demand," he said.

Economists said maturation will apt falter successful nan 2nd 4th arsenic caller taxes connected businesses were imposed successful April. Also, a raft of value rises during nan month, including home power and h2o bills, are expected to support a lid connected user demand.