By Obinna Uballa
Britain’s economy expanded more than expected in the second quarter of 2025, though growth eased from the strong pace seen earlier in the year, as higher business taxes and new US tariffs weighed on activity.
Gross domestic product rose 0.3 percent between April and June, the Office for National Statistics (ONS) reported on Thursday, surpassing analysts’ forecasts of 0.1 percent growth. This followed a robust 0.7 percent expansion in the first quarter.
“Today’s economic figures are positive, with a strong start to the year and continued growth in the second quarter,” Finance Minister Rachel Reeves said. “But there is more to do to deliver an economy that works for working people.”
The ONS said gains in the services and construction sectors helped offset a decline in production output. Growth was led by services such as computer programming, healthcare, and vehicle leasing, according to Liz McKeown, ONS director of economic statistics.
Official data released a day earlier showed unemployment at a four-year high of 4.7 percent, reflecting the impact of the Labour government’s decision to raise business taxes in April—the same month US President Donald Trump’s administration imposed a 10 percent baseline tariff on most UK goods.
The tariffs, coupled with a fragile global economy, have prompted the Bank of England to take a more accommodative stance.
Recall that last week, the central bank cut its benchmark interest rate by 0.25 percentage points to 4 percent.
“The weak global economy will remain a drag on UK GDP growth for a while yet,” said Ruth Gregory, deputy chief UK economist at Capital Economics. “The full impact on business investment from April’s tax rises has yet to be felt, and speculation over further tax increases in the autumn budget will likely keep consumers cautious.”
