London May 15 (Reuters) – The British economy recorded the performance over expectations in the first quarter of 2025, which strengthened the position of government and financial minister, Rachel Reeves. However, you will face a more challenging scenario in the coming months, due to the increase in taxes on companies and commercial conflicts with the United States, led by President Donald Trump, in its second term.
According to the official data issued on Thursday, between January and March, the British GDP has advanced 0.7 %, a significant increase compared to a modest rate of 0.1 % recorded in the past three months of 2024. The result exceeded 0.6 % of the leading expectations with economists, which coincided with the Bank of England (BOE).
In March, in isolation, the economy was also surprised by an increase of 0.2 % compared to February, unlike the estimated stability (0.0 %) referred to by Reuters. The British pound had a simple estimate against the dollar after revealing the numbers.
Reeves classified the goal of criticizing entrepreneurs and opposition by raising contributions to social security from April, as a sign of economic activity in the country. “In the first three months of the year, the UK economy grew faster than the United States, Canada, France, Italy and Germany,” he said.
Growth is driven by services and investments
In partnership with Minister Reeves, the government of Prime Minister Kiir Starmer is seeking to revitalize the economy through investments in infrastructure and other reforms aimed at attracting private capital. However, the Bank of England warned last week that the motivation that was observed in the first quarter should be a passenger. Cash power expectations are 1 % growth by 2025, with modest acceleration to 1.5 % by 2027.
In addition to internal obstacles, the trade tensions of the company of the company to slow down the global economy. British entrepreneurs have already expressed concern about the impact of increasing salary lists and the minimum wage, both in force since April.
According to Surain Thero, Director of Economy at the Accountants Institute and Wales (ICAEW), ICAEW may be a strong performance in the first quarter driven by companies to fulfill requests before the new American definitions enter into force. “This strong result may represent the high economic growth this year, with a great slowdown in the foreground, due to the weight of taxes, definitions and global instability,” said Thiru.
According to the United States of America, it is diluted, but not solve
A new trade agreement signed last week between the United Kingdom and the United States can soften part of the negative effects. Under the strike, Washington will reduce the British steel and aluminum rates, but will retain new taxes by 10 % on most other products imported from the United Kingdom.
Although uncertainty, British consumers did not show great signs of attention. Modern data indicates an increase in family spending between March and April.
The National Bureau of Statistics (ONS) reported that the growth in the first quarter was mainly withdrawn by the services sector, highlighting the resumption of industrial production. Corporate investments made a 5.9 % jump compared to the last quarter of 2024, the highest increase in two years.
According to Elliott Jordan-Dok, the major economists in the macroeconomic consultations in Pantheon, part of this is due to the significant increase in the import of aircraft, which is calculated as a commercial investment.
Indeed, the gross domestic product of the venous individual – which is considered an indicator of growth by the population – increased by 0.5 %, reflecting two consecutive semester falls, as mentioned.
