The UK’s economy saw surprise growth in March, despite the month seeing the first impact of the Iran war.
The economy grew by 0.3%, confounding analysts’ forecasts of a small contraction, although the effects of the conflict are expected to hit growth later this year.
The Office for National Statistics (ONS) said there were signs that consumers and businesses brought forward spending in March due to fears over future price rises brought about by the war.
Chancellor Rachel Reeves said the growth figures showed the government had “the right economic plan”, but warned a Labour leadership contest risked “plunging the country into chaos”.
Economic growth in the first three months of the year was 0.6%, the ONS said, led by a rebound in areas such as retailing and construction.
The quarterly growth is the fastest for a year, and is also the highest of all the G7 countries to have reported data so far. Last month, the IMF warned that the UK would be the hardest hit from the war of the world’s advanced economies.
The ONS said there had been signs of so-called front-loading in March, with some businesses it surveyed “cited activity being bought forward in anticipation of increases in costs because of conflict in Iran”.
One such area was car sales and leasing. The ONS said retailers had reported that motorists were stocking up on fuel as prices rose sharply.
Danni Hewson, head of financial analysis at AJ Bell, said some drivers may have been given a “nudge” to buy an electric vehicle (EV) in March because of rising fuel prices.
