UK economy is growing more than expected - how optimistic should you be?

The UK economy grew by 0.7% at the start of this year.

This was better than expected, but this level of growth is not predicted to last.

It's better than forecast

The numbers matter because a higher growth rate usually means people are getting paid a little bit more, can spend more and more jobs are created.

Before the announcement, experts expected the economy to grow by 0.6% between January and March, compared with the last three months of 2024.

The fact the actual number is a tiny bit higher at 0.7% suggests people were willing to spend more than was expected.

The Office for National Statistics (ONS), which works out the figure, said spending on services such as retail, hospitality and finance in particular was strong.

The growth figure for March 2025 also beat expectations.

Analysts predicted no growth at all in March, but the economy ended up expanding by 0.2% that month.

• What is GDP?

The UK is growing faster than other big countries

Though the UK's growth rate of under 1% might seem small, it's higher than that seen by other large economies around the world.

It was the highest in the G7, which is a group of countries that includes the US, Canada, France, Germany, Italy and Japan.

All of these countries have had to deal with a big shock to global trade - the tariffs brought in by the US at the start of the year.

They make goods going into the US more expensive, which means the US may be likely to buy less from other countries.

That could reduce the amount the UK sells to US customers.

The fact that the UK was still able to beat expectations in this time is a promising sign.

Trump's tariffs hadn't come in yet

The US is the UK's biggest foreign market after the European Union, which means what happens across the Atlantic matters.

Donald Trump's so-called "Liberation Day", when he announced most of the tariffs on foreign goods, came on 2 April, and the tariffs themselves came into force shortly after.

That is after the period measured in the latest economy figures, so we won't see the full effects of the tariffs for a while.

Many businesses expected the tariffs to come, so made sure they exported their goods to the US before they kicked in.

That extra increase in production and sales is part of the reason the economy grew from January until March.

Economist Paul Dales from Capital Economics said this growth "might be as good as it gets for the year".

That's because UK exports to the US may fall now that the tariffs are being applied, and economists expect that to slow growth.

The UK did a deal with the US last week which cut some tariffs, but it is unclear when this will take effect as the details are ironed out.

• What is in the UK-US tariff deal?

Tax and bill rises mean we might not feel richer

Any positive effects from a bigger UK economy might not be felt that widely.

That is because some bills and taxes went up at the start of April.

Energy, water, phone and broadband bills all rose.

Council tax also increased, alongside car tax and TV licences.

Some businesses have complained that a rise in the amount of National Insurance they have to pay, as well as an increase in the minimum wage, mean they cannot hire as many workers.