The Office for National Statistics (ONS) has confirmed the economy grew by 0.7 per cent in the first three months of the year. The figures, released this morning, are the ONS’s second attempt at estimating growth in the first quarter and, unusually, the GDP growth number was unrevised from the initial estimate.
The strong growth – the fastest pace in a year – between January and March could be the last bit of economic good news Chancellor Rachel Reeves is able to celebrate this year as this set of numbers cover the period before her £25 billion raid on employer national insurance came into effect. It does, however, confirm that Britain was the fastest growing country in the G7.
The growth was driven by the services sector with both production and construction growing too. Households were spending more as well which also helped growth.
Since then, however, monthly GDP figures – which need to be taken with a pinch of salt because they tend to be ‘noisey’ – have shown a contracting economy with GDP shrinking 0.3 per cent in April.
There’s reason to believe worse is to come, though, after over 100,000 payroll jobs were lost in a single month and following the continued fall-out from Trump’s ‘liberation day’ tariffs. Bad ‘vibes’ are having an effect too, with businesses holding back on the investment the country badly needs and shoppers retreating from the high street.
While the growth figures from the start of the year offer a rare bit of good news for the Chancellor, the broader economic picture appears increasingly fragile. Job losses are mounting, consumers are losing confidence – rightly or wrongly – and the immediate future of global trade looks choppy. The challenge for the Chancellor will be to sustain momentum in an economy that may already be turning a corner in the wrong direction.
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