UK GDP rose by 0.2% in March 2025, following a stronger-than-expected 0.5% increase in February, according to the latest figures from the Office for National Statistics. The economy expanded by 0.7% across the first quarter, marking the fastest pace of quarterly growth since Q2 2024.
Services output, the largest contributor to the UK economy, grew by 0.4% month-on-month in March. The construction sector also showed resilience with output rising 0.5%. However, production output fell by 0.7%, largely due to a drop in manufacturing.
Isaac Stell, investment manager at Wealth Club, said: “With the winds of tariff turmoil whipping up economic seas, today’s better than expected GDP figures for the UK show an economy that has so far been able to navigate itself to calmer waters.
“Output grew during the month across two of the three major sectors, with the economic engine, the services sector growing by 0.4%. Construction saw solid progress whilst production slipped due to falls in the manufacturing sector. UK GDP grew at a faster rate of knots during the first quarter and its fastest rate in three quarters. Impressive, albeit backward looking.
“It could be easy to get carried away by today’s positive surprise, but the winds of tariff turmoil are yet to be fully appreciated in the figures. It was only a few days after the quarter end that the ‘Liberation Day’ tariffs were announced and the impact from the tariff induced storm will likely have pitched the economy onto a different path, at least in the short term.
“Navigating back to port is likely only to get harder in the coming months due to the higher living wage and national insurance rises that came into effect in April, coupled with the tariff turmoil, this could make for a bumpy economic ride for the rest of the year.”
Mike Randall, CEO at Simply Asset Finance, added: “Stronger than expected GDP growth in the first quarter reflects what we’ve seen on the ground – businesses have remained active and confident in the face of ongoing economic pressure.”
“But this is just the starting point. The challenge now is to build on that momentum and move decisively towards sustainable, long-term growth. Many businesses have already adjusted to the new cost realities and are ready to push ahead – but they need the right conditions to do so.”
“The Government’s long-awaited industrial strategy must play a central role in unlocking this next phase. SMEs are the driving force of the UK economy – with policy execution, access to capital and targeted infrastructure investment, they can fuel the growth the country urgently needs.”
