UK Economy Surprises with 0.5% Growth, Avoids Recession
Better-than-expected GDP data lifts sterling and boosts prospects for Labour government's economic agenda.
The UK economy grew 0.5% in the first quarter, defying predictions of stagnation and providing a boost to the Labour government's economic plans.
The growth was driven by stronger-than-expected consumer spending and a rebound in construction activity. Services, which account for about 80% of GDP, expanded for the third consecutive quarter.
"This is encouraging news, but we have much more work to do," said Chancellor of the Exchequer Rachel Reeves. "Our focus remains on boosting investment and productivity."
Sterling rose to its highest level against the dollar in over a year, while gilt yields fell as traders reduced bets on Bank of England rate cuts.
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