The British economy grew by 0.7 percent in the first three months of the year, new official figures show.
Gross domestic product (GDP) grew faster than expected and with the fastest rate in one year, according to Office for National Statistics, in a boost to Chancellor Rachel Reeves.
The figures showed economic growth in the first quarter of 2025 – ahead of us Donald Trump’s “Liberation Day” in early April.
The US president imposed on sweeping tariffs for countries around the world – including Britain – which sent global markets tumbled and gained financial instability.
Mrs. Reeves said the growth spokes showed that the government “made the right choices” but recognized “there is more to do”.
“Today’s growth number shows the strength and potential of the British economy,” she said.
“In the first three months of the year, the British economy has grown faster than the United States, Canada, France, Italy and Germany. Up on the basis of global uncertainty, we make the right elections now in national interest.”
She added: “Our plan for change works. But I know there is more to do and that is why I am determined that we go ahead and faster to make working people better off.”
The 0.7 percent growth means that it came ahead of economists’ expectations of 0.6 percent growth for the quarter.
It was also the highest GDP rate since the first quarter of 2024, when the economy jumped by 0.9 percent.
Economists at Confederation of British Industry (CBI) said the increase in activity was “a pleasant surprise” but warned the strength of GDP over Q1 is “likely to prove a one -time”.
“Companies remain careful about hiring and investment plans, considering the steep increase in employment costs after the autumn budget,” said Ben Jones, main economist at CBI.
“Now it is a critical time for the government to have hard growth in the economy through the upcoming review of consumption.”
The company’s national insurance contribution increased from April, as some economists have said, will force companies to cut jobs.
And the United States imposed a 10 percent rug for most British goods coming into the world’s largest economy, which is expected to directly affect exporters and have led to increased uncertainty affecting businesses and households.
The latest figures show that economic growth slowed to 0.2 percent in March from 0.5 percent in February when activity among British factories began to fall.
Liz McKEOWN, WES Director of Economic Statistics, said: “The economy grew strongly in the first quarter of the year, largely driven by services, although production also grew significantly after a period of decline.
“The growth of services was broad-based, with wholesale, retail and computer programming, all of which had a strong quarter, like car leasing and advertising.
“These were only slightly offset by falls in education, telecommunications and legal services.”
The ministers also acknowledged that the latest GDP figures do not yet account for the effect of the government’s hike in national insurance contributions for employers.
Asked about the tax increase that came into force in April, Finance Minister Emma Reynolds said BBC breakfast: “Sure it’s true because it’s about the first quarter of the year, then January to March. I mean, of course, I don’t want to sit here and predict what can happen after that, but I think the basic elements of the economy look very strong.”
Shadow Chancellor Sir Mel Stride also pointed out that both Office for Budget Responsibility (OBR) and International Monetary Fund (IMF) had downgraded short-term growth forecasts and hit by hiking in employers’ national insurance, which he labeled a “job tax”.
“Although it is welcome that the economy is growing, both OBR and the IMF have downgraded Britain’s growth,” said Sir Mel.
“Works job tax, unemployment bill and reckless choices have seen the number of unemployed increases by 10% and working families £ 3,500 worse.”
Growth Commission Member Ewen Stewart said the figures “flatter to deceive” and warned that “the underlying position of the economy remains very weak”.
He added: “The more important matrix is not headline GDP, but the real GDP per capita, which better reflects the total living standards. Although this grew by 0.5 percent in 1st quarter, this is on the back of the fall in the previous two quarters.
“In addition, the real GDP per capita has hardly risen since 2020, which is unprecedented in modern economic history.
“Significant tax increases – especially increased employers’ NiCs – first came into force in April and are sure to put together the growth crisis facing British. This crisis is largely self -inflicted as increased taxation, slightly controlled public spending and ever -increasing regulation fees optimism and potential.”
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