The UK economy grew by an unexpected 0.7 per cent in the first quarter of 2025, marking its strongest quarterly performance in over a year, according to official figures released by the Office for National Statistics this morning [15th May.]
The growth, up from just 0.1 per cent in the final quarter of 2024, exceeded economists’ expectations of a 0.6 per cent rise. It also likely makes the UK the fastest-growing economy in the G7 at the start of the year.
The surge was bolstered by improvements across key sectors. Services, the largest component of the UK economy which covers areas such as retail and hospitality, grew by 0.7 per cent. Production output, including manufacturing and energy, rose by 1.1 per cent, while construction activity showed no overall change.
GDP per capita, a measure of economic output per person, also increased by 0.5 per cent. However, it has risen just 0.1 per cent since Labour entered government last July, and remains below pre-pandemic levels.
The figures mark a sharp reversal from earlier in the year when economists warned the UK was likely to slip into a recession. In January, forecasters pointed to stagnant growth, weak demand, and high interest rates as warning signs for 2025.
Instead, business activity picked up in the run-up to April’s new US tariffs, with GDP rising by 0.2 per cent in March alone, suggesting firms may have accelerated output ahead of potential trade disruption from Donald Trump’s so-called “Liberation Day” measures.
While the outlook remains uncertain, the first quarter’s growth signifies a degree of resilience in the UK economy as it adjusts to both domestic policy shifts and global economic pressures.
Colin and Kim Hansen / Wikimedia Commons
