UK economy sees fastest growth in a year, as business investment exceeds expectations

The UK economy expanded by 0.7% quarter-on-quarter in Q1, marking its fastest pace of growth in a year. Notably, business investment rose by 5.9% – a notable divergence from recent firm sentiment data.

Export volumes also rebounded following three consecutive quarters of decline, which we attribute to a temporary surge in trade activity ahead of President Trump’s tariff announcements on 2^nd April.

Indeed, Q1’s data does not consider the implementation of these tariffs.

Despite being scaled back, these are expected to weigh on growth in the months ahead, with the recently signed UK-US trade agreement likely to only offer limited support to economic prospects. As such, we maintain our view that the UK economy will grow by just over 1% this year.