{"id":103567,"date":"2025-05-15T13:03:11","date_gmt":"2025-05-15T13:03:11","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/103567\/"},"modified":"2025-05-15T13:03:11","modified_gmt":"2025-05-15T13:03:11","slug":"why-has-uks-economy-grown-so-fast-in-last-three-months-and-what-does-it-mean-news-politics","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/103567\/","title":{"rendered":"Why has UK\u2019s economy grown so fast in last three months and what does it mean? | News Politics"},"content":{"rendered":"

\t\t\"Mandatory
\n\t\tThe UK\u2019s gross domestic product grew by 0.7% in the first quarter of 2025, according to the ONS (Picture: Amer Ghazzal\/Shutterstock)<\/p>\n

The UK\u2019s economic outlook has been a little gloomy recently, with assessment after assessment suggesting growth will be low for some time to come.<\/p>\n

So it was an unexpected boost to Chancellor Rachel Reeves<\/a> when figures this morning revealed the economy<\/a> actually grew by 0.7% in the first quarter of this year.<\/p>\n

Economists had predicted 0.6% growth in British gross domestic product for the period.<\/p>\n

Reeves said the figure from the Office for National Statistics<\/a> (ONS) demonstrated the government<\/a> is \u2018making the right choices now in the national interest\u2019.<\/p>\n

However, this morning\u2019s announcement covers the quarter before major moves came into effect that economist believe will impact growth \u2013 including the Trump tariffs and the increase in employers\u2019 national insurance contributions.<\/p>\n

Prime Minister Keir Starmer said: \u2018I know the Tory cost-of-living crisis isn\u2019t over \u2013 we will go further and faster to deliver for working people.\u2019<\/p>\n

\t\t\t\tSign up to Metro’s politics newsletter, Alright Gov?\t\t\t<\/p>\n

Craig Munro breaks down Westminster chaos into easy to follow insight, walking you through what the latest policies mean to you. Sign up here<\/a>.<\/p>\n

What is GDP and how does it affect me?<\/p>\n

The government has described achieving strong economic growth as its number one mission.<\/p>\n

It is measured using the UK\u2019s gross domestic product (GDP), the term given to the total value of all the goods and services produced in the country.<\/p>\n

According to the ONS, this total was 0.7% higher in the first quarter of 2025 than it was in the last quarter of 2024, giving us the latest growth figure.<\/p>\n

It\u2019s good news for the government, as it suggests the country is becoming more productive which should translate to more jobs and more money.<\/p>\n

Why has the UK\u2019s economy grown so fast?<\/p>\n

The ONS said the latest boost was driven by the output from the services sector, by far the largest chunk of the UK economy.<\/p>\n

Production output also grew by 1.1% in the first quarter of the year, while construction output showed no growth in that period.<\/p>\n

Economists think this strong swell in production could have resulted from businesses moving quickly to buy machinery and push out exports to the US before Donald Trump announced his tariffs \u2013 more on those later.<\/p>\n

What could happen next to the economy?<\/p>\n

There\u2019s a chance this latest growth figure may be the last piece of economic good news for a little while.<\/p>\n

Last month, the rise in company national insurance contributions announced by Reeves at the Budget last year came into effect.<\/p>\n

Some economists have said this measure could lead firms to cut jobs, which would harm growth.<\/p>\n

\t\t\"\"
\n\t\tDonald Trump shows his list of tariffs in his \u2018Liberation Day\u2019 speech last month (Picture Chip Somodevilla\/Getty Images)<\/p>\n

Meanwhile, the sweeping tariffs announced by US President Donald Trump last month are expected to have a significant impact on businesses and households into the future.<\/p>\n

The government managed to strike a trade agreement with the US last week, which brought down tariffs on steel and aluminium as well as cars.<\/p>\n

However, the 10% baseline levy which applies to all exports from the UK that arrive in the US is still in effect, and Trump has suggested that is unlikely to change soon.<\/p>\n

How does the UK\u2019s growth compare to other major countries?<\/p>\n

Keir Starmer said this morning\u2019s announcement showed he was meeting his goal of achieving the highest growth among G7 countries.<\/p>\n

Considering just the figures from the first quarter of this year, he is right \u2013 here\u2019s how the other nations in that group of advanced economies fared.<\/p>\n