Business News
UK Economy Grows 0.7% in Q1 2025
According to the Office for National Statistics, the UK’s economy rose 0.7% in Q1-2025. The UK Q1-2025 GDP beats predictions of a 0.6% forecast.
The growth figure boosts the UK’s ruling Labour government, which has struggled to kick-start a sluggish economy. Nevertheless, the UK faces a stiffer test due to its tax hike on businesses and President Trump’s tariffs.
The UK’s economic growth of 0.7% in Q1 is a sharp increase of 0.1% in Q4-2024 and 0.2% in March 2025.
UK finance minister Rachel Reeves welcomed the news, stating the figures “show the strength and potential of the UK economy.”
Key Drivers of Growth of the UK’s Economy in Q1-2025
Services & Production Sectors Lead the Way
The most significant contributor to increased services output was the growth in the administrative and support service activities, which increased by 3.3%. Other Notable contributions came from wholesale and retail trade (up 1.6%) and information and communication (up 1.9%). However, the education services experienced a decline of 0.6%.
The UK’s production sector expanded by 1.1% following declines in the previous three quarters. This growth was primarily driven by a 0.8% increase in manufacturing and a considerable 4.0% increase in water supply, sewerage, waste management, and remediation activities. In addition, the supply of electricity, gas, steam, and air conditioning increased by 1.8%, while mining and quarrying dropped by 0.5%. Manufacturing gains were robust in transport equipment (up 2.7%) and machinery and equipment (up 3.8%).
Manufacturing
UK’s Manufacturing output grew by 0.8% in Q1-2025, following a 0.6% fall in Q1-2024. The most significant positive contributions were manufacturing transport equipment, which grew by 2.7%, and manufacturing machinery and equipment, which grew by 3.8%. Furthermore, the growth in transport equipment was primarily driven by a surge in the production of motor vehicles, trailers, and semi-trailers. However, the manufacture of basic metals and metal products declined by 3.0%, due to a 3.6% decline in the manufacture of fabricated metal products.
Exports & Imports
UK’s export volumes increased by 3.5%, driven by a 5.6% increase in goods exports and a 2.0% increase in services exports. The United Kingdom’s top export partners include the United States, Germany, Belgium, the Netherlands, the UAE, Hong Kong, Switzerland, Ireland, China, and France. Key UK exports include machinery, precious metals, vehicles, pharmaceuticals, and electric machinery.
UK import volumes increased by 2.1% in Q1, driven by increases of 0.6% and 5.2% in goods and services imports, respectively. China, Germany, France, the United States, Italy, and Norway are its key import partners. Its top imports include crude oil, machinery, plastics, pharmaceuticals, precious metals, aircraft, and vehicles.