London stocks opened in the red, as data reveals the UK economy beat expectations for growth in the first quarter of 2025.
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The economy grew by 0.7% between January and March of 2025, 0.1% higher than analysts’ forecast.
Celebrating the figures, Sir Keir Starmer responded: “The UK now has the fastest growth in the G7. We’ve had four interest rate cuts since July and wages are rising faster than prices.”
According to the Office for National Statistics, this unexpected growth is due to the UK services sector, with notable contributions from wholesale, retail, and computer programming. Liz McKeown, ONS director of 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.”
Chancellor, Rachel Reeves says these figures show “strength and potential of the UK economy” and are evidence of the Labour government’s successful economic policies.
But Shadow Chancellor, Mel Strides, is critical of the figures, saying that this growth is ‘inherited’ not credited by the Labour Government: “what we know this morning is this 0.1 per cent increase in GDP over the last quarter, which is just one seventh of what the US has achieved.”
In terms of the future, Simon Pittaway, senior economist at the Resolution Foundation, also said the growth rebound was “unlikely to last, with data for April looking far weaker, and huge tariff-shaped clouds hanging over the global economy.”
So, despite the positive first-quarter results, anxieties remain about the impact of factors like increased national insurance contributions and US tariffs on future economic results.
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HeadlineUK GDP grows by 0.7% which is the fastest growth in the G7
Short HeadlineUK economy grows more than expected
StandfirstThe UK economy grew by 0.7% between January-to-March of 2025, higher than analysts' forecast of 0.6%.
The economy grew by 0.7% between January and March of 2025, 0.1% higher than analysts’ forecast.
Celebrating the figures, Sir Keir Starmer responded: “The UK now has the fastest growth in the G7. We’ve had four interest rate cuts since July and wages are rising faster than prices.”
According to the Office for National Statistics, this unexpected growth is due to the UK services sector, with notable contributions from wholesale, retail, and computer programming. Liz McKeown, ONS director of 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.”
Chancellor, Rachel Reeves says these figures show “strength and potential of the UK economy” and are evidence of the Labour government’s successful economic policies.
But Shadow Chancellor, Mel Strides, is critical of the figures, saying that this growth is ‘inherited’ not credited by the Labour Government: “what we know this morning is this 0.1 per cent increase in GDP over the last quarter, which is just one seventh of what the US has achieved.”
In terms of the future, Simon Pittaway, senior economist at the Resolution Foundation, also said the growth rebound was “unlikely to last, with data for April looking far weaker, and huge tariff-shaped clouds hanging over the global economy.”
So, despite the positive first-quarter results, anxieties remain about the impact of factors like increased national insurance contributions and US tariffs on future economic results.
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