The UK economy grew at the fastest pace for more than a year at the start of 2025, official figures have confirmed, as buoyant household spending helped drive the rebound.
The Office for National Statistic (ONS) said gross domestic product (GDP) rose by an unrevised 0.7% between January and March.
The ONS said that while the quarterly out-turn was unrevised, monthly growth was slightly higher than first thought in March, at 0.4% compared with the initial estimate of 0.2%.
January saw zero growth and February saw expansion of 0.5%, both unrevised.
Household spending was also revised up, from 0.2% to 0.4%, as the savings ratio fell for the first time in more than two years, to 10.9% over the quarter, as consumers dipped into their savings to spend.
The first-quarter growth figure – which was unrevised from the initial estimate – marks the highest GDP rate since the first quarter of 2024, when the economy jumped by 0.9%.
It was also a significant improvement on the 0.1% growth seen in the final three months of 2024.
Liz McKeown, ONS director of economic statistics, said: “While overall quarterly growth was unrevised, our updated set of figures show the economy still grew strongly in February, with growth now coming in a little higher in March too.
“There was broad-based growth across services while manufacturing also had a strong quarter.
“The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong.”
Output grew by 0.7% in the services sector over the first quarter, while production also increased, by 1.3%, and the construction sector grew by 0.3%.
Experts said there were clouds over the horizon for the economy, with more recent monthly GDP data showing a 0.3% contraction in April.
Matt Swannell, chief economic adviser to the EY Item Club, said: “After the strong start to 2025, the UK looks set for another year of weak growth, with headwinds continuing to intensify.
“On top of weakening real income growth, fiscal policy has been tightened, while some households will still feel the lagged effects of past interest rate rises.
“Global trade market volatility and the accompanying elevated levels of uncertainty have added to the headwinds.”
Thomas Pugh, chief economist at tax consultancy RSM UK, said: “Looking ahead, the second quarter will look substantially worse than the first quarter as there is some payback from activity brought forward to avoid taxes and tariffs.
“The big question now is whether the recent string of weak data in retail sales and employment is a one-off, due to the initial shock of tax increases and tariffs, or whether it’s the start of a new trend,” he added.
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