The UK economy grew faster than expected in the first three months of the year. According to figures just released by the Office for National Statistics, GDP rose by 0.7 per cent in the first quarter – ahead of economists’ forecasts. If this pace were maintained across the rest of the year, Britain would far outperform its G7 peers

Growth was broad-based: the services sector expanded by 0.7 per cent, while production surged by 1.1 per cent – a notable bounce after a period of decline. Even on a per capita basis, GDP rose by 0.5 per cent after falling for two consecutive quarters.

So, is this a vindication of Chancellor Rachel Reeves, or just a fluke? Reeves was quick to take credit, hailing the results as evidence of ‘the strength and potential of the UK economy’. As she pointed out, Britain outpaced the US, Canada, France, Italy and Germany in Q1. But it’s worth looking more closely at what might be driving these figures and whether they’ll last.

This growth came in the run up to Trump’s ‘liberation day’. In March, the Purchasing Managers’ Index (PMI) – a gauge of business activity – hit a five-month high, as companies rushed to stockpile ahead of anticipated trade barriers. Exports also surged for the same reason. In short, some of this growth may simply be activity brought forward that would have otherwise happened later in the year.

And there’s historical context to consider: in the same period last year, the economy grew even faster at 0.9 per cent. The labour market is also showing signs of strain, with the £25 billion national insurance raid beginning to bite. More recent PMI figures paint a far gloomier picture. As businesses reckon with higher costs – from both the tariff turmoil and from growth-hampering employment policies – reinvestment in productivity is likely to suffer. The remaining quarters of the year could look very different.

Still, this unexpected growth spurt will likely prompt forecasters to revise up their estimates for 2025. Crucially, that includes the Office for Budget Responsibility, whose projections determine whether the Chancellor can meet her self-imposed ‘ironclad’ fiscal rules. Any upward revision from the OBR will make it marginally easier for Reeves to stay within those rules – and delay the conversation about the fiscal crisis that ever looms because of the sheer size of Britain’s state.

Plus as I write in The Spectator’s cover story out today, some of Britain’s most important taxpayers have fled – taking their capital, investment and jobs with them. Economic growth driven by temporary trade distortions and government incentivised spending is one thing. Sustained, high-quality growth is unlikely to come until the country’s fiscal position goes through a serious reset.