Britain’s economy grew unexpectedly in March, helping to push quarterly growth to its fastest pace in a year, official data showed on Thursday.
The news is likely to be welcomed by Finance Minister Rachel Reeves as the government pushes to revitalise the economy.
Gross domestic product (GDP) rose 0.2% in March compared to February, defying economists' expectations of no change, according to the poll.
Over the first quarter of 2025, GDP grew by 0.7%, above the 0.6% forecast and the Bank of England's projection.
The Office for National Statistics (ONS) said growth was led by the services sector, while production and business investment also recorded solid gains following previous declines.
“Today’s growth figures show the strength and potential of the UK economy,” Reeves said in a statement.
“In the first three months of the year, the UK economy has grown faster than the US, Canada, France, Italy and Germany.”
Reeves and Prime Minister Keir Starmer are aiming to stimulate economic performance through infrastructure spending and pro-investment reforms.
Despite the upbeat data, the Bank of England warned that the first-quarter surge may be short-lived. It expects full-year growth in 2025 to reach just 1%, edging up to 1.5% by 2027.
Global headwinds, including trade tensions driven by US President Donald Trump’s tariffs, are expected to weigh on economic momentum.
Meanwhile, UK businesses have raised concerns over rising employment costs tied to tax increases and the higher minimum wage under Reeves.
However, British consumers have remained resilient. Recent data showed an increase in consumer spending during March and April, suggesting stable domestic demand.
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