PREVIEW

UK Economy Sees Strong Q1 Growth Ahead of Expected Slowdown. The UK economy grew 0.7% in Q1 2025, marking its fastest pace in a year, driven by homebuyers and manufacturers. The growth in March was revised to 0.4%, up from 0.2%, providing a stronger finish to the first quarter. However, output is expected to slow, with GDP falling 0.3% in April, partly due to one-off factors. The Bank of England forecasts growth of 0.25% in Q2, with finance minister Rachel Reeves hoping for a rebound. Weak consumer spending and hiring in recent weeks were linked to tax increases and U.S. import tariffs, which have since been suspended. Consumer confidence is improving, with business surveys showing a positive outlook for the UK economy. The Bank of England is expected to cut interest rates twice more in 2025, which could boost household spending. A potential rise in energy prices due to Middle East tensions could strain the economy despite improvements in other areas.
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