UK Economy Surprises with Strong Growth in March, Outpacing Global Rivals
The UK economy posted an unexpected boost in March, with quarterly growth reaching its fastest pace in a year, according to data released on Thursday.
This positive development is likely to be seen as a win for Finance Minister Rachel Reeves, as the government continues efforts to stimulate economic recovery.
Gross Domestic Product (GDP) rose by 0.2% in March compared to the previous month, outperforming analysts’ predictions of flat growth. For the first quarter of 2025, the economy expanded by 0.7%, exceeding both the 0.6% market forecast and the Bank of England’s estimates.
The Office for National Statistics (ONS) attributed this momentum mainly to the services sector. Additionally, production and business investment rebounded after earlier downturns.
“These growth figures highlight the strength and potential of the British economy,” Reeves stated. “In the first quarter alone, the UK outpaced economic growth in the US, Canada, France, Italy, and Germany.”
Reeves and Prime Minister Keir Starmer have launched initiatives focused on infrastructure investment and business-friendly reforms to drive long-term growth.
However, the Bank of England remains cautious, suggesting the strong Q1 performance may not last. The central bank forecasts a modest 1% overall GDP growth for 2025, gradually rising to 1.5% by 2027.
Challenges remain on the global front, with trade uncertainty linked to US President Donald Trump’s renewed tariffs expected to impact economic momentum.
At the same time, domestic businesses have expressed concerns about rising labor costs due to increased taxes and a higher minimum wage introduced under Reeves’ economic plans.
Still, consumer confidence appears strong. Spending in March and April showed steady growth, indicating robust demand from UK households.
