UK economy expected to have grown in first months of 2025

The UK economy is expected to have grown in the opening months of the year, before tax rises and announcements on US tariffs came in during April.

The Office for National Statistics will report the UK’s gross domestic product (GDP) figures for January to March on Thursday morning.

Economists are forecasting GDP growth of 0.6% after a much stronger winter than initially expected.

However, the economy is expected to have been flat in March after a 0.5% jump during February.

The first quarter figures represent the period directly before Donald Trump imposed a swathe of global trade tariffs as part of his April “Liberation Day” announcement.

They also come before the increase in company national insurance contributions, which some economists have said will force firms to cut jobs.

The tariffs and tax rises are expected to pull down the economy in the second quarter of 2025.

Nonetheless, 0.6% growth for the first quarter would come as a boost for Chancellor Rachel Reeves and Labour, who have made growing the economy their top priority.

Analysts at Deutsche Bank wrote in a research note that first quarter growth “will likely have jumped significantly – outpacing almost all forecasters’ expectations coming into the year”.

“By all accounts, a surprisingly stronger end to 2024 combined with some strength in domestic spending and frontrunning of trade ahead of Liberation Day will have led to a bigger jump to start the year.”

But they added: “The bump higher in activity will likely be short lived, however.

“We expect GDP growth to reverse in the second quarter, before slowly edging higher through the course of the year – and eventually returning to its trend growth rate in early 2026.”

The Bank of England last week upgraded its prediction for the year ahead, forecasting that the economy will grow by 1% in 2025, ahead of its previous 0.75% forecast on the back of a strong start.

The Bank’s policymakers cut UK interest rates to 4.25% this month after a slowdown in inflation.

The GDP announcement will come after recent data which the ONS said pointed to a “cooling” jobs market in the first quarter of the year.

Earlier this week, figures showed that wage growth eased back in the three months to March while Britain’s unemployment rate hit a near four-year high.