Britain’s economy expanded a little faster than expected in the first quarter, as a strong performance from the services sector offset a decline in industrial output.
Gross domestic product (GDP) rose by 0.2 percent month-on-month in March, the Office for National Statistics said today in a preliminary estimate. Analysts had expected it to stay stagnant. That left GDP up by 0.7 percent over the first three months of the year, a little more than the 0.6 percent forecast.
The Bank of England had said last week that, while it expected a solid performance in the first quarter, the U.K. economy is likely to slow again over the rest of the year. That’s due not least to a brief surge in exports as firms tried to get their goods into the U.S. before it imposed trad tariffs.
The ONS data only captures economic performance ahead of President’s Trump April 2 tariff package which upset financial markets and prompted the International Monetary Fund to trim its 2025 growth outlook for advanced economies by 0.7 percentage points to 1.2 percent.
The U.K. was one of the first countries to ink a trade deal with Washington — but as an open, medium-sized economy it remains exposed to any breakdown in the global trading order. BoE officials warned that the indirect effect of U.S. tariffs on the U.K.’s other trading partners, especially the EU, were likely to be larger than the direct ones on Britain.
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