The UK economy grew unexpectedly in March, despite the early impact of the war in Iran.
Gross domestic product rose by 0.3%, beating forecasts of a small contraction. The Office for National Statistics said some consumers and businesses appeared to bring forward spending because they feared higher prices later in the year.
Retailers reported stronger fuel sales as motorists stocked up in response to sharp price rises, while some businesses told the ONS that activity had been pulled into March ahead of expected cost increases linked to the conflict.
In the first quarter of the year, the economy grew by 0.6%, helped by a rebound in sectors such as retail and construction. However, economists warned that the war’s wider impact may still weigh on growth in the months ahead.
Chancellor Rachel Reeves said the figures showed the Government’s economic plan was working. She said stronger growth would allow ministers to invest more in public services and provide further support for families and businesses facing cost pressures.
Reeves also warned that speculation over the prime minister’s position and a possible Labour leadership contest could damage economic stability.
Shadow chancellor Mel Stride said Labour’s internal divisions were already unsettling the economy, pointing to rising borrowing costs and competing spending pledges.
Liberal Democrat Treasury spokesperson Daisy Cooper said the quarterly figures were already “in the rear-view mirror” because of the war.
The ONS also revised earlier figures down, cutting February’s growth estimate from 0.5% to 0.4% and January’s from 0.1% to zero.
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