U.K. economy grew more than expected in Q1; GDP rose 0.7%

Published 15/05/2025, 07:12
© Reuters.

Investing.com - Growth in the U.K. economy picked up in the first quarter of the new year, after a weak end to 2024, but has also shown signs of slowing as 2025 has progressed.

Data released earlier Thursday by the Office for National Statistics showed that U.K. gross domestic product grew by 0.7% in the January-March period of 2025 - a jump from the meager 0.1% growth record in the October-December 2024 period, and above the 0.6% growth expected. 

On an annual basis, the U.K. economy expanded by 1.3% in the first quarter of the year, retreating from growth of 1.5% seen the prior year.

Last week the Bank of England cautioned that “erratic factors”, such as disruptions to manufacturing output at the end of last year, would inflate headline GDP growth in the first quarter.

This was illustrated by the GDP release for the month of March alone, which showed growth of 0.2% on a monthly basis, after a healthy jump of 0.5% in February.  

Still, this was above the flat figure expected, and offered some encouragement to Chancellor Rachel Reeves that the government’s push for higher growth was finally working.

This GDP data doesn’t include the period when U.S. President Donald Trump launched his trade war at the start of April. But with a trade deal having been agreed with the U.S., the risk of exorbitant tariffs, and thus a major obstacle to growth, has been removed.

 

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