Live UK economy grew more than expected ahead of Trump tariffs
Britain's economy grew more than expected in the first three months of the year, official figures show, as businesses braced for Donald Trump's tariff raid.
UK gross domestic product (GDP) expanded by 0.7pc in the first quarter of 2025, according to the Office for National Statistics.
Economic growth was stronger than the 0.6pc that had been predicted by analysts and well up on the 0.1pc experienced in the final three months of 2024, in a boost for Sir Keir Starmer.
It came as business activity picked up in the lead up to Donald Trump's 'liberation day' tariffs on April 2, with the economy expanding by 0.2pc in March.
Closely watched PMI data had shown that UK business activity hit its highest level in five months in March.
The American economy shrank in the first three months of the year as US companies ramped up imports, which count against GDP projections. Exports add to economic growth estimates.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Auto Blog
31 minutes ago
- Auto Blog
Stellantis Exec Wants Europe to Adopt Cheap, Tiny, Japanese-Style Kei Cars
The spread of Kei cars Though it may seem different today, more than half a century ago, American and European drivers were not as familiar with Japanese automakers and the types of cars they offered. Today, well-known Japanese brands like Honda, Toyota, and Nissan are primarily recognized in the West for their locally built compact cars, sedans, crossovers, SUVs, and pickup trucks. However, the situation is quite different in Japan. In fact, the majority of vehicles on the streets in Japan are not Accords, Civics, CR-Vs, Corollas, Crowns, or Camrys; instead, many fall under a category of super-compact vehicles known as 'Kei cars.' These unique compact vehicles are an essential mobility solution for Japanese drivers navigating their roads, but recently, Stellantis Chairman John Elkann encouraged European regulators to consider adopting a similar concept. Exor's CEO and Chairman of Stellantis, John Elkann Europe needs the 'E-car,' says Stellantis Chairman On June 12, Stellantis Chairman John Elkann emphasized the urgent need for Europe to innovate and produce smaller, more affordable vehicles in the same vein as Japanese 'kei cars.' He pointed out that the high prices of current offerings, which he blamed squarely on excessively strict vehicle regulations, are hurting consumer demand for cars on the continent. During his remarks at the 2025 Automotive News Europe Congress, he pointed out that as recently as 2019, nearly 50 different models were sold in Europe with a price tag below €15,000 ($17,400); however, just a single model under that price tag exists these days. Elkann suggested that Europe should look for inspiration from Japan, where tiny and cheap kei cars have long captured a significant market share. He even proposed that Europe's version of the kei car could be named the E-Car. Daihatsu Copen 'There's no reason why, if Japan has a kei car, which is 40 percent of the market, Europe should not have an E-Car,' Elkann said. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. In Europe, Stellantis already sells electric microcars that are classified as quadricycles in some European countries, specifically the bubble-shaped Citroën Ami, Opel Rocks-e, and Fiat Topolino. These vehicles' sales in Europe show a strong market for affordable electric mobility. However, a large variety of cars are offered as kei-compliant vehicles in Japan, including off-roaders like the Japanese-market Suzuki Jimny, roadsters like the Daihatsu Copen, family cars like the Honda N-Box, and even utility-focused kei trucks like the Mitsubishi Minicab. Suzuki Jimny The 'Kei' in Kei car is short for a Japanese word called kei-jidōsha (軽自動車), which roughly translates to 'light vehicle' in English. Kei cars are defined by maximum size and displacement restrictions, meaning they are only allowed to have a maximum length of about 134 inches, a width of about 58 inches, a height of about 79 inches, and a gas engine displacement of 660 cubic centimeters. In Japan, Kei cars are seen as around-town vehicles for city-dwellers, as their size and engine restrictions help owners by guaranteeing much lower tax and insurance costs while freeing up much-needed road space. Elkann emphasized that small cars, like Stellantis's own Fiat 500, have historically represented the core of the European automotive industry and served as a symbol of affordable mobility for the masses. Unfortunately, increasing regulations that made cars heavier and more expensive have made them unprofitable to manufacture. Honda N-BOX — Source: Honda Some of the requirements for cars, ranging from small vehicles to SUVs, include safety features such as sensors that detect when a driver falls asleep and an SOS button. Elkann argues that features significantly increase the cost of vehicles primarily used for short city journeys. 'We are going to face more than 120 new regulations by 2030' in Europe, he said. 'If you look at our engineers, more than 25 percent just work on compliance, so no value is added.' Final thoughts Though the buying preferences of the American car-buying public may indicate that no Fiat, Citroën, or Alfa Romeo-branded European E-cars would make it on American shores, this story out of Europe shows that Stellantis is facing two different kinds of problems on two different continents with huge car-buying potential with two wildly different sets of preferences. While we may be preoccupied with Ram Trucks and Jeep stuff, it is important to note that John Elkann and the incoming CEO, Antonio Filosa, are also responsible for keeping a significant number of Europe's car factories buzzing. However, in remarks at the same conference, Elkann said that Filosa was the right choice in an automotive industry with defined challenges in particular regions. 'The experience that Antonio had running Argentina, running Brazil, running South America, and recently running North America is very much in phase with how the world is going between regulations, tariffs, and how you ultimately navigate that constructively with political forces,' he said. About the Author James Ochoa View Profile
The Guardian
an hour ago
- The Guardian
Letting banks loose is back on the agenda as UK politicians chase growth at any cost
As the old ways of turning a profit become more difficult – from assembling cars to selling soap powder – politicians of all stripes want the City to inject some dynamism into the economy. From Labour to Reform, the siren call of London's financial district is strong. If only, they ask, the wheels of the banking industry could be cranked to spin faster, surely much more money could be generated and we would all be rich. While Rachel Reeves boasted of the huge benefit to economic growth from public investments in rail and renewable energy as central pillars of the government's spending review, in truth it is not enough to propel the economy forward. To generate the kind of income that will pay for the next 30 years of an ageing society, plans to link Manchester and Liverpool by a marginally faster and more reliable train, though good in itself, is not the answer. The Treasury knows it is just an upgrade to existing services and will deliver only incremental returns. To turbocharge growth, the chancellor wants private money to take the lead, partnering government to share the burden of building bridges and tunnels and spurring investments in whizzy new ventures. And as a start, the Treasury wants the shackles taken off the bankers so they can become more inventive in the way they make money, taking risks that were previously frowned upon, if not banned, and rewarding themselves accordingly. It is 18 years since Northern Rock's high-risk mortgage lending began to unravel and 17 years since Lehman Brothers went bust. Long enough, it seems, for memories to fade, and with them concerns about the damaging consequences of light-touch regulation. That said, it's easy to see why the temptation to let the banks loose is back on the agenda. UK banks are among the most profitable in Europe and London plays host to the largest number of foreign banks. The UK's unicorn businesses – those privately held startup companies worth more than £1bn – rank in number behind only the US, India and China. Some startups are considered to be at the forefront of the financial technology boom, including Revolut and Monzo. What could be better for Britain than to leverage a fintech industry that already has a worldwide reputation? Revolut has championed handling funds invested in cryptocurrencies, and for this service, and its banking and wealth management, it has emerged as the most successful European fintech of the past decade. It was valued at $45bn last year. And there is no stopping the chief executive, co-founder and 25% owner, Nikolay Storonsky. He plans to expand into mortgages and consumer lending to challenge the major lenders, as well as growing in the US. Monzo is the digital bank best known for its coral pink debit cards. After 10 years, the company announced its first profit last year, of £15.4m, after more than doubling revenues to almost £900m. Reeves also wants pension funds to take more risks, which is a boon for an asset management industry that has fallen out of favour with the public in recent years due to its high charges and failure to deliver returns that better passive investments. Last week, the House of Lords financial services regulation committee gave Labour's mission a boost. It attacked the main City watchdogs – the Financial Conduct Authority and the Prudential Regulation Authority – for having 'a deeply entrenched culture of risk aversion'. In a report that the Treasury will have privately welcomed, the committee said the regulators were partly to blame for holding back economic growth. If the FCA and PRA, which have already pledged to reduce the paperwork and oversight of the City, become more trusting of its ability to manage risk, there is likely to be a sugar rush of activity, much as there was during the noughties. Labour has helped get the ball rolling by lifting the bankers' bonus cap, to allow publicly listed banks to join the bonanza of rewards enjoyed by executives in Revolut and Monzo. Monzo may have made only £15.4m profit but this modest sum was not to be re-invested. It was enough to warrant big payouts, including a £12m bag of cash and shares that Reuters said most likely went to the chief executive, TS Anil. Underscoring how light-touch regulation is matched by executive pay bonanzas, a report last month by the jobs website eFinancialCareers found that bonuses in the UK's investment banks had risen by 26% year on year, beating their equivalents in Asia, Europe and the US. The average bonus payout for a City executive was about £110,000. And the trickle-down effect works in finance. At junior levels, bonuses increased by as much as 133%, the survey found. Labour's backbench MPs know how this play ends. After all the partying and profit-making, there will be a severe hangover. And when that happens, the taxpayer is asked to save the day. Somehow, the profits of the financial sector belong to the bosses and the losses belong to the people.
The Guardian
an hour ago
- The Guardian
Vodafone terminates contracts of 12 franchisees who joined £120m lawsuit
Vodafone has terminated the contracts of 12 franchisees who have continued running the brand's high street stores while also being part of a £120m high court claim against the telecoms group. The legal case was launched in December, when 62 franchisees claimed Vodafone had 'unjustly enriched' itself at the expense of scores of vulnerable small business owners by slashing commissions to franchisees operating the mobile phone company's retail outlets. A dozen of the claimants had remained in the franchise programme even though they had joined 50 former colleagues in pursuing the legal case. Some of the 62 said they had had suicidal thoughts because of the pressure exerted by the telecoms group – while many claimed the company's actions made them fear they would lose their livelihoods, homes or life savings after running up personal debts of more than £100,000. Vodafone, which says the legal claim is worth £85.5m, has consistently argued the case is 'a complex commercial dispute between Vodafone UK and some franchise partners and we refute the claims'. Responding to news that the 12 current franchisees are having their contracts terminated, a Vodafone spokesperson said: 'We are focused on building a successful and thriving franchise programme. As a result, we have a clear duty to do everything we can to support those franchise partners who are committed to our joint success. 'The dispute has been ongoing for over two years and a number of the claimants have remained within the franchise programme and had their contracts renewed during that time. However, we are increasingly concerned about the impact negative campaigning is having on our franchise programme.' The spokesman added: 'After careful consideration, and with disappointment, we therefore decided it was no longer viable for us to work with franchise partners who are supporting the negative campaign against the business.' A franchise is a type of licence that allows a company to sell a product or service under another business's brand name, in return for paying certain costs such as rent and wages. As part of their deals, Vodafone franchisees were paid commissions based on the handset and airtime revenues they generated from customers visiting their stores. The court papers allege that the FTSE 100 company acted in 'bad faith' by unilaterally cutting fees to its franchisees; imposing swingeing fines on them totalling thousands of pounds for seemingly minor administrative errors; and then pressuring them into taking out loans and government grants to keep their businesses afloat. Vodafone said it strongly refutes that the company 'unjustly enriched' itself and said it had conducted a number of investigations into the allegations, which resulted in the company making 'a number of improvements to our franchise partner programme'. The group's investigations 'concluded that some actions between Vodafone and franchise partners had not always adhered to the standards we expect, however no evidence of misconduct was found'. The mobile operator has added that it had paid back almost £5m to franchisees including the 'retrospective reimbursement of fines and clawbacks'. It has since emerged that, two years before the high court claim was launched, whistleblowers had warned a series of senior Vodafone executives that scores of its franchised store owners faced financial ruin. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Meanwhile, talks to settle the dispute ended without resolution last month – leaving the case potentially heading for the high court. Vodafone announced earlier this month that it had sealed a £16.5bn deal to combine its British arm with its rival Three UK. The merger, first proposed in 2023, creates the UK's largest mobile operator with a network of more than 27 million subscribers. On Thursday, the new VodafoneThree joint venture said it planned to close some of its almost 650 stores on high streets and in shopping centres where the two former brands had outlets in close proximity. The Vodafone chief executive, Margherita Della Valle, has previously said: 'The commercial dispute is specifically between Vodafone UK and some of our franchisees. Our first joint attempt at mediation has not resolved the dispute despite our best engagement. We remain open to further discussions as the process continues.'
