According to preliminary data from the Office for National Statistics (ONS) released on Thursday, the U.K. economy expanded by 0.7% in the first quarter of 2025. This growth exceeded the 0.6% increase anticipated by economists surveyed by Reuters, following minimal expansion of 0.1% and stagnation in the previous two quarters.
The ONS attributed this growth primarily to a 0.7% rise in the services sector, a 1.1% increase in production, while construction showed no change.
Sanjay Raja, an economist at Deutsche Bank, cautioned that this initial surge might be temporary. He noted that a stronger-than-expected end to 2024, boosted domestic spending, and pre-Liberation Day trade activities contributed to the early-year increase.
The investment bank predicts that this uptick in activity is likely to be fleeting, acknowledging the possibility of higher risks. The analyst expects a decrease in GDP growth in the second quarter of 2025, with a gradual recovery over the year, eventually aligning with its trend growth rate by early 2026.
