The UK economy outperformed expectations in the first quarter of the year, growing by 0.7% between January and March, according to the Office for National Statistics (ONS). Analysts had

forecast a slightly lower increase of 0.6%.

Growth was largely driven by the services sector, though the production sector also recorded significant gains. The figures capture economic activity just before the U.S. introduced tariffs on imports in April.

Chancellor Rachel Reeves hailed the results as a sign of the UK's economic strength, noting that the UK outpaced other major economies including the U.S., Canada, France, Italy, and Germany during the period.

However, shadow chancellor Mel Stride highlighted concerns, pointing to downgraded growth forecasts from both the Office for Budget Responsibility and the International Monetary Fund. He also criticised April’s increase in employers' National Insurance contributions, calling it a "jobs tax."

"Labour inherited the fastest-growing economy in the G7, but their decisions have put that progress at risk," he said.

In March alone, the economy grew by 0.2%, exceeding flat growth expectations. HSBC senior UK economist Liz Martins described the figures as encouraging, noting robust business investment—up nearly 6% for the quarter—and a strong performance from the services sector.

"This isn't just about companies rushing to export ahead of tariffs," she said. "The growth is coming from solid fundamentals." Photo by Philippe Salgarolo, Wikimedia commons.