UK’s G7-Topping Growth Confirmed Before Taxes And Tariffs Hit
GlendonThe UK economy grew strongly in the first quarter of the year, official data confirmed Monday, before the Labour government’s tax hikes and extra US tariffs came into effect.
The UK economy grew strongly in the first quarter of the year, official data confirmed Monday, before the Labour government’s tax hikes and extra US tariffs came into effect.
The Office for National Statistics said UK gross domestic product rose 0.7% in the first three months of the year, unrevised from the first estimate published in May. It was the strongest quarterly performance in a year and made Britain the fastest-growing of the Group-of-Seven economies.
The savings ratio declined to 10.9% in the first quarter, down 1.1 points from a historically high level. The fall was driven by people saving less outside their pensions.
The outlook has darkened since the start of April amid a sharp drop in employment, weak retail sales and plunging exports to the US. BOE Governor Andrew Bailey recently warned of weak underlying growth as businesses pause investment and consumers hold back on spending.
Chancellor of the Exchequer Rachel Reeves’ £26 billion ($36 billion) increase in a payroll tax kicked in at the start of April, a measure she said was necessary to shore up the public finances but which has also been blamed for denting sentiment and pushing up food prices. At the same time, US President Donald Trump unleashed a wave of global tariffs, knocking economic prospects even though the UK struck a partial deal to lessen some of the impact on British exports.
