UK Economy Surges Ahead of Forecast, But Challenges Remain

The UK economy experienced a surprise boost in the first three months of 2025, growing by 0.7% according to new figures. This is higher than the 0.6% predicted by economists, who cited a stronger-than-expected winter as a contributing factor. The growth was largely driven by the services sector, but the production sector also contributed positively. Chancellor Rachel Reeves welcomed the news, stating, "We've seen growth really across the piece in services, manufacturing, business investment, exports and household spending." However, she acknowledged the ongoing challenges of the cost of living crisis, emphasizing her focus on "making working people better off." The report also highlights concerns about the slower-than-expected annual growth of 1.1%, and the fact that real GDP per head remains below pre-pandemic levels. While the government has announced trade deals and aims to boost growth further, questions remain about how these policies will address the persistent economic challenges faced by many.