UK economy grows at fastest quarterly rate in a year in boost for Reeves

The UK economy grew at the fastest rate in a year over the first quarter of 2025, in a boost to Chancellor Rachel Reeves, new official figures show.

Gross domestic product (GDP) increased by 0.7% between January and March, the Office for National Statistics (ONS) said.

This means it came in ahead of economists’ expectations of 0.6% growth for the quarter.

It was also the highest GDP rate since the first quarter of 2024, when the economy jumped by 0.9%.

Ms Reeves said the figures “show the strength and potential of the UK economy”.

“Up against a backdrop of global uncertainty we are making the right choices now in the national interest,” she said.

US President Donald Trump’s “liberation day” tariff announcements.

Company national insurance contributions increased from April, which some economists have said will force firms to cut jobs.

GDP grew 0.7% in Quarter 1 (Jan to Mar) 2025.

Services (+0.7%) and production (+1.1%) both grew, while construction (0.0%) was flat.

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— Office for National Statistics (ONS) (@ONS) May 15, 2025

And the US has imposed a 10% blanket tariff on most UK goods entering the world’s biggest economy, which is expected to directly impact exporters and has led to heightened uncertainty affecting businesses and households.

The latest figures show that economic growth slowed to 0.2% in March, from 0.5% in February, as activity among UK factories began to slump.

Liz McKeown, ONS director of economic statistics, said: “The economy grew strongly in the first quarter of the year, largely driven by services, though production also grew significantly, after a period of decline.

“Growth in services was broad based, with wholesale, retail and computer programming all having a strong quarter as did car leasing and advertising.

“These were only slightly offset by falls in education, telecoms and legal services.”

The services sector jumped by 0.7% over the quarter, compared with the last three months of 2024, with administrative and support service activities surging by 3.3%.

Retail trade increased by 1.4% over the quarter, while sports and recreation activities picked up by 5.8% in March as warmer weather swept across the UK.