The UK economy grew by 0.7% in Q1 2025, its fastest pace in a year, beating forecasts of 0.6%.

This made the UK the fastest-growing economy among G7 nations for the quarter. Growth was driven mainly by the strong performance of the services sector.

Treasury chief Rachel Reeves said the figures reflect the early success of Labour’s economic policies since taking office in July 2024.

Economists expect growth to slow in Q2 due to new business taxes, higher household bills, and global uncertainty from US trade policies.

A new UK-US trade deal brought some relief, with reduced tariffs on British autos, steel, and aluminium, though overall demand may still weaken.

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