The UK economy has surpassed expectations with a 0.7 per cent growth in the first quarter, driven primarily by the services sector and significant growth in production after a period of decline.
According to the Office for National Statistics (ONS), this growth beats economists’ forecasts of a 0.6 per cent increase.
The data comes as a boost for Prime Minister Keir Starmer and his Labour government, which has struggled to kickstart stagnant growth since taking power in July.
UK Finance Minister Rachel Reeves welcomed the news, saying that the figures “show the strength and potential of the UK economy,” while acknowledging that “there is more to do”.
Analysts, however, cautioned that this growth may not be sustained due to upcoming challenges.
“This might be as good as it gets for the year,” said Paul Dales, chief UK economist at Capital Economics.
Yael Selfin, chief economist at KPMG UK, also noted that the growth spurt was “set to be short lived as tariffs take effect”.
The recent US-UK trade agreement reduces tariffs on British cars and removes those on steel and aluminum, but the baseline 10 per cent tariff remains intact.
Selfin added that “tariffs on UK exports to the US remain significantly higher than what they were prior to April” and “the indirect impact of trade tensions between the US and the EU will further constrain demand for UK exports”.
AFP
