The UK economy continued its steady recovery in March 2025, with real GDP growing by 0.2 percent, building on February's stronger 0.5 percent rise. This monthly momentum contributed to a 0.7 percent increase over the first quarter of 2025 compared with the previous quarter, signalling broad-based resilience. The services sector was the clear growth engine, expanding by 0.4 percent in March and 0.7 percent across the quarter, underlining its dominant role in driving economic activity.

However, beneath the headline growth, sectoral divergences remain. Production output fell by 0.7 percent in March, erasing part of February's sharp 1.7 percent gain. Despite this setback, production still posted a quarterly gain of 1.1 percent, suggesting underlying strength in manufacturing and energy supply earlier in the period. Construction output also edged up 0.5 percent in March, though it stagnated across the quarter, pointing to possible pressures from higher costs or slower project starts.

The modest growth in March reinforces the view of a cautiously expanding economy, buoyed by services and supported intermittently by industry and construction. While short-term volatility persists, especially in production, the broader trajectory remains positive heading into the second quarter of 2025. This update takes the RPI to 22 and the RPI-P to 22, meaning that economic activities continue to stay well ahead of market expectations in the UK.

Forecasters see GDP flat on the month in March after a surprising 0.5 percent increase in February.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. The monthly report is based on output data only as the income and expenditure series are not available.

GDP covers all aspects of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market investors like to see healthy economic growth because robust business activity translates to higher corporate profits. GDP contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. However, the monthly report is quite limited and only provides data on the main output sectors. More detailed information is available in the quarterly reports.