Today’s GDP report could spur economists to revise higher their forecasts for growth this year higher. Economist Julian Jessop explains: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Britain’s economy is under the microscope today, as we eagerly await the first estimate for UK GDP for the first quarter of the year. Economists are expecting to learn that growth picked up in the January-March quarter, after a weak end to 2024. GDP is forecast to have risen by a relatively pacy – by recent standards – 0.6% in Q1 2025. That would be rather quicker than the sluggish 0.1% recorded in October-December 2024. A pick-up in growth would be warmly welcomed by chancellor Rachel Reeves, as it might indicate that the government’s push for higher growth was finally getting moving. However, last week the Bank of England cautioned that “erratic factors”, such as disruptions to manufacturing output at the end of last year, would inflate headline GDP growth in this quarter. Growth data for March alone will also be released at 7am – it’s expected to show that GDP stagnated in the month, after a strong February (data last month showed 0.5% growth). GDP data always gives a ‘rear view mirror’ of the economy, but today’s data feels particularly historic – as it covers the period just before “Liberation Day”, when Donald Trump launched his trade war at the start of April (before a flurry of backtracking on tariffs). Michael Field, chief equity strategist at Morningstar, sets the scene: “UK GDP is expected to be flat in March, meaning a year over year rise of 1%, not blow-out, but growth nonetheless. Investors will be able to place a little more faith in the trajectory of growth in the UK now that a trade deal has been agreed with the US and the risk of exorbitant tariffs has been removed. But inflation, at 2.6%, is still outpacing growth by some measure, and some areas of the economy like manufacturing and industrial production are expected to have gone backwards over the last 12 months. The agenda 7am BST: UK GDP report for Q1 2025 7am BST: UK trade balance report for March 9.30am BST: UK labour productivity report for Q4 2024 10am BST: Eurozone employment and GDP reports for Q1 2025 1.30pm BST: US weekly jobless claims report 1.30pm BST: US retail sales report for April 1.30pm BST: US producer prices index (PPI) for April 1.40pm Jerome Powell speech (Framework Review at the Thomas Laubach Research Conference, Washington DC) 3pm BST: Swati Dhingra: Speech at the New Economics Foundation conference ‘EU macroeconomic policy in an age of shocks’, Brussels
Author: Graeme Wearden