Britain’s economy expanded unexpectedly in March, rounding off a stronger-than-anticipated first quarter and suggesting the economy was in a better position than many analysts had feared as tensions surrounding the Iran conflict escalated.
Data released on Thursday by the UK Office for National Statistics (ONS) showed that gross domestic product (GDP) grew by 0.3 per cent month-on-month in March, defying economists’ expectations of a 0.2 per cent contraction.
The growth was driven by strong performances across the services sector, construction output and manufacturing.
For the first quarter as a whole, the British economy expanded by 0.6 per cent, marking the third consecutive year of notably strong first-quarter growth.
However, analysts warned that sustaining the momentum through the rest of the year could prove difficult amid rising geopolitical tensions and mounting inflationary pressures linked to the Iran conflict.
Scott Gardner, investment strategist at J.P. Morgan Personal Investing, said investors remained cautious about the durability of the expansion.
“Many will be unconvinced that this momentum can be sustained throughout this year,” Gardner said.
“The risk is that the energy price spike following the start of the Iran conflict will persist and lead to a rebound in inflation.”
Recent business surveys have pointed to rapidly increasing cost pressures, which economists say could weigh on corporate activity and consumer spending in the coming months.
The ONS also published a blog on Thursday acknowledging that there may have been post-pandemic shifts in the timing of spending patterns across the economy. The agency consequently revised down its first-quarter growth readings for both 2024 and 2025.
Despite the concerns, British Finance Minister Rachel Reeves said the latest figures showed that the government’s economic strategy was delivering results.
Reeves said the data demonstrated that she had “the right economic plan” for the country.
Boluwatife Enome
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