KPMG UK comments on today’s GDP data

“Today’s GDP figures show economic activity picked up ahead of the US tariffs announcement in April. Growth is expected to slow due to both domestic and global headwinds hampering business activity. However, higher government spending and relatively resilient consumer spending could provide a silver lining, helping the UK economy attain growth of around 1% in 2025.

"Exports rose sharply by 3.5% in the first quarter but are expected to see renewed weakness over the coming year. Despite last week’s trade agreement with the US, tariffs on UK exports to the US remain significantly higher than what they were prior to April. Additionally, the indirect impact of trade tensions between the US and the EU will further constrain demand for UK exports.

“Despite strong growth in the first quarter, the UK’s fiscal outlook remains weak. Economic momentum is expected to slow significantly over the coming quarters, increasing the likelihood that the government will fall short of its fiscal targets in the autumn. This could prompt difficult decisions if the government decides to keep within current fiscal rules.”