Britain has outpaced major international rivals for growth in the first quarter of this year, by accelerating in January-March.
The UK’s 0.7% growth in Q1 2025 shows it was the fastest-growing economy in the G7 during the last quarter – a clear boost for the government this morning.
In contrast,USGDP contracted slightly due to a surge of imports to beat Donald Trump’s trade war.
Now, we don’t getJapan’sGDP report until tomorrow morning (a small contraction is expected), andCanada’sdata is only an early estimate.
But as things stand, here’s the G7 growth league table:
UK: +0.7% growth
Canada:estimatedto have grown by 0.4%
Italy: 0.3% growth
Germany: 0.2% growth
France: 0.1% growth
US:-0.075%(or -0.3% on an annualised basis)
Japan: reporting tomorrow, -0.1%forecast
There’s been a worrying jump in mortgage repossessions this year.
New data from theMinistry of Justiceshow that, compared to the same quarter in 2024, there were increases in mortgage possession claims from 5,182 to 6,765 (31%), orders from 3,013 to 4,624 (53%), warrants from 2,919 to 3,517 (20%) and repossessions by county court bailiffs from 769 to 1,092 (42%).
This is another sign of the financial pressures on households, despite the recent cuts to UK interest rates.
Adam Butler,public policy manager atStepChange Debt Charity,says:
Newsflash: The UK government has moved a step closer to selling all its stake in NatWest bank.
The Treasury’s stake in NatWest has now fallen to 0.90%, down from 1.98% previously.
The government has been trimming its stake by selling NatWest shares back to the market, cutting a stake which it took when it rescued Royal Bank of Scotland (as it was then called) in 2008.
Last year, the then-Conservative government. had planned to sell the stake to the public in a flashy “Tell Sid”-style campaign (harking back to the Thatcher privatisations of the 1980s), but that plan was scuppered by the general election.
Disappointing growth news - the eurozone didn’t expand quite as quickly as first estimated in the first quarter of this year.
Statistics bodyeurostathas cut its estimate for eurozone growth in Q1 2025 to +0.3%, down fromits initial estimate last monthof +0.4% growth.
Ireland recorded the fastest rise in GDP – up 3.2% in the quarter, due to increased activity at its multinationals. Contractions were measured inSlovenia(-0.8%),Portugal(-0.5%) andHungary(-0.2%).
This updated data confirms that the UK outpacedGermany(+0.2%),France(0.1%) andItaly(+0.3%).
The number of UK customers defaulting on their energy and water bills has jumped, a sign of the pressures on households.
The Direct Debit failure rate for “Electricity and Gas” bills rose by 27%, year-on-year, last month, from 2.13% in April 2024 to 2.71% in April 2025.
Water bill direct debit failures rose by 14%, from 0.96% to 1.09%.
Overall, the seasonally adjusted “Total” Direct Debit failure rate for April 2025 decreased by 1% from March 2025, but increased by 5% from April 2024.
UK chancellorRachel Reeveshas said there are clearly economic headwinds approaching,Reuters reports.
Asked if the strong growth in Q1 was sustainable,Reevestold reporters:
Reevesalso emphasised the significance of the government’s recently-announced trade agreements with the United States and India.
She said the government was “working through the detail” on the U.S. deal - a limited bilateral trade agreement that leaves in place Trump’s 10% tariffs on British exports.
Prime minister Sir Keir Starmer has welcomed today’s UK GDP data, saying the government is meeting his target of having the highest growth in the G7 group of leading democracies.
As we covered at 7.29am, theUK’s0.7% growth in January-March beats theUS,France,GermanyandItaly, and will probably outpaceCanadaandJapantoo.
SirKeirsaid:
Our Politics Live blog is tracking all the reaction in Westminster to the growth report:
The International Energy Agency (IEA) has forecast that demand for oil will slow this year, due to economic headwinds and record sales of electric vehicles.
In its latest monthly report, the IEA predicts that global oil demand growth will slow from 990,000 barrels per day in the first quarter of 2025 to 650 kb/d for the remainder of the year.
The IEA reckons signs of a slowdown in global oil demand growth may already be emerging. It says:
Britain’s forecast-beating growth hasn’t brought much cheers to the London stock market.
TheFTSE100index of blue-chip shares has dipped by 0.5% in early trading, down 40 points at 8544 points.
Oil companies are among the fallers, with BP falling by 4.6% and Shell down 3%.
That follows a 3% drop in the oil price this morning, on hopes of a US-Iran nuclear deal, withBrentcrude trading around $64 per barrel.
Oil is lower after US president Donald Trump said today that the United States was getting very close to securing a nuclear deal with Iran, and Tehran had “sort of” agreed to the terms.
“We’re in very serious negotiations with Iran for long-term peace,” Trump said on a tour of the Gulf, according to a pool report by AFP.
A deal could lead to sanctions relief for Iran, releasing more oil onto the market.
Away from the UK GDP data…Schools, care homes, hospitals and community centres are in line for more than £630m in government funds to fit heat pumps, solar panels, insulation and double glazing to help cut the energy bills of public buildings.
The government revealed the allocations for the Liverpool City Region Combined Authority, the Northumbria NHS Foundation Trust, the Royal Air Force Museum Midlands, Worcester City Council and the University of York, promising an estimated £650m in savings for taxpayers every year for the next 12 years.
Its latest clean energy drive was revealed hours after legislation passed to set up its state-owned energy companyGreatBritishEnergylate on Wednesday.
GBEnergywas a key pillar of the Labour government’s election manifesto and has pledged to back the company with £8.3bn over the course of this parliament to invest alongside the private sector in community energy projects and new technologies like floating offshore wind.
GBEnergy’schairJuergenMaiersaid the company was created “to ensure British people reap the benefits of clean, secure, homegrown energy”.
Maieradded:
Energy secretaryEd Milibandwill soon outline GB Energy’s strategic priorities – including which technologies it will focus on and how it should consider the public benefits from investment decisions.
Britain’s exports to the US have hit their highest level in over two years, helping to boost growth and narrow the UK’s trade deficit.
Exports of goods to the United States increased by £2.4bn in January to March, to £17.5bn, the highest level since the fourth quarter of 2022.
This could suggest a rush of demand to import goods into the US before Donald Trump announced his new tariffs on early April.
The ONS explains:
UK imports from the US rose by less, increasing by £1.3bn, helping to boost the UK’s trade balance.
PaulDales, chief UK economist atCapitalEconomics, says this will have added to GDP:
Dalesadds:
Raj Badiani,economics director, Europe atS&P Global Market Intelligence,says:
Disappointingly, economists are predicting that the UK won’t sustain its strong growth.
TheResolutionFoundationthinktank fears UK growth stumbled in April – the month when Donald Trump’s trade wars rattled the world economy.
SimonPittaway, senior economist at theResolutionFoundation, says:
Matt Swannell,chief economic advisor to theEY ITEM Club, predicts that quarterly GDP growth across the rest of this year is likely to be slower than in Q1, explaining:
One wrinkle in today’s generally decent UK GDP report is that the construction sector stagnated in the last quarter.
Construction output was unchanged January-March, compared with October-December, the ONS reports.
This was due to a 1.2% drop in repair and maintenance work, which wiped out a 0.9% rise in new work.
In March alone, though, construction output grew by 0.5%, following growth of 0.2% in February.
Scott Gallacher,director at financial plannersRowley Turton, says:
This morning’s strong growth figures will ‘blow away’ talk of a UK recession, points out theBBC’seconomics editorFaisal Islam.
Today’s GDP reading is “very good news for the economy”, reports Professor Costas Milas, of the University of Liverpool’s Management School.
He tells us: