London, UK The UK economy expanded by 0.7% in the first quarter of 2025, surpassing forecasts and marking the fastest growth in over a year. This surge was largely driven by a significant increase in business investment and a spike in exports ahead of anticipated U.S. tariffs.
According to the Office for National Statistics, the services sector grew by 0.7%, while production saw a 1.1% rise. Construction, however, remained flat during this period.
Business investment climbed by 5.9%, the strongest quarterly gain in two years, fueled by increased spending on transport, aircraft, IT, and machinery. Analysts suggest that some of this growth reflects businesses accelerating orders in preparation for upcoming trade restrictions.
Despite the upbeat data, experts caution that the momentum may not be sustained throughout the year. The Bank of England forecasts modest overall growth of around 1% for 2025, warning of potential slowdowns due to global trade uncertainties and domestic policy changes.
The UK’s 0.7% growth in Q1 also outpaces other G7 economies, positioning Britain as the fastest-growing major economy during this period.
