UK first-quarter growth confirmed at 0.7%

(Sharecast News) - Data released on Monday by the Office for National Statistics showed the UK economy grew 0.7% in the first three months of the year, confirming a preliminary estimate released in May. Growth was driven by a 0.7% increase in the services sector, while production also grew, by 1.3%, and the construction sector saw 0.3% growth.

ONS director of economic statistics Liz McKeown said: "While overall quarterly growth was unrevised, our updated set of figures show the economy still grew strongly in February, with growth now coming in a little higher in March too.

"There was broad based growth across services, while manufacturing also had a strong quarter.

"The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong."

Danni Hewson, head of financial analysis at AJ Bell, said: "Confirmation that the UK economy delivered the fastest growth of any G7 country at the start of the year feels almost redundant.

"A mix of tariff woes and tax hikes have created a period of such uncertainty and instability that many businesses have simply pressed pause on their future plans, and in some cases taken the decision to cut labour costs in order to set them up for what might be down the tracks.

"A deal between the UK and US is gradually working its way through the small print and the motor sector has been able to ramp up exports in the last few hours.

"But there are still questions about steel and aluminium exports, and about the potential impact on British manufacturing of Donald Trump's trade talks with other countries which could include commitments to shift some production to the US.

"The early growth spurt looks set to be an anomaly rather than the sustained expansion the government needs if it's to pad treasury coffers without resorting to tax rises or further spending cuts."