UK Economy Grows 0.6% in Q1 Despite Iran War, Outpacing G7 Peers

The British economy grew by 0.6 percent in the first quarter from January to March, official figures show. The expansion exceeded recent sluggish performance and came despite the Iran war raging in the final month of the period.

Faisal Islam highlighted six charts explaining the economy's performance. Growth per capita also picked up, marking the fastest pace in four years since Russia's invasion of Ukraine triggered an energy shock. This measure accounts for population increases that can inflate headline GDP.

The UK outperformed other G7 nations. Japan has not reported yet, but its figure is expected to trail Britain's. The IMF had forecast last month that the UK would suffer the worst hit among major economies, a prediction that has not materialized so far.

Household energy bills may have played a role through protective measures. The current shock centers more on oil than gas, and Britain has grown less sensitive to gas prices in recent years.

Services, construction and manufacturing all expanded. Wholesale and retail trade saw a lift, pointing to sturdy consumer spending. Professional scientific activities and information and communications sectors advanced, aligning with strong investment in the UK AI and tech sector, dubbed "Britmaxxing."

Some areas faltered amid higher fuel and chemical costs. Machinery and equipment declined, as did administrative services. House building bears watching, particularly with fixed mortgage rates climbing.

Consumer confidence has slipped in the latest readings, reflecting fuel and mortgage cost increases that could curb future growth. The chancellor and prime minister hope for an end to Gulf hostilities and a reopening of the Strait of Hormuz.