There are signs the economy could grow at a similar pace in the second quarter, with ONS and private sector surveys showing sustained strength among Britain’s businesses.
Growth in the first quarter was broad across the economy, raising hopes that it would be sustained.
Every sector of the economy, the dominant service sector, expanded. Trade also contributed to development.
Retail sales rose as consumer-facing services rose 0.6%, rebounding from a decline at the end of 2023, and manufacturing picked up after slipping into recession. However, construction is still struggling in the face of high borrowing costs.
Business investment also increased by 0.9 percent, giving a boost to future activity.
Forecasts by the National Institute of Economic and Social Research suggest that GDP will increase by another 0.6pc in the current quarter.
The return to growth is a boost for the government as the prime minister prepares to call a general election later this year.
Rishi Sunak, on a visit to Oxfordshire on Friday, cheered the prospect of families getting well: „Undoubtedly, after two years in the country, things are really starting to feel better now.”
„Confidence is returning to the economy and the country, and I hope you’re starting to feel it too.”
The economy is now 1.7% bigger than it was before the pandemic — the worst growth rate in four years, especially compared to the US, which grew 8.7% over the same period.
However, Holger Schmiding, an economist at Berenberg Bank, said Britain was „finally catching up a bit”.
He said: „The UK economy has underperformed the US and the Eurozone since the start of the pandemic. The decline was deeper in 2020 and followed by a stronger recovery in 2022 than the Eurozone following a surge in energy and food prices.
Now, he said, Britain „may be starting to make up some of the lost ground.” „We expect growth in the UK to be slightly higher than in the eurozone, particularly in the coming years”.
However, the surprising strength of the economy could delay the Bank’s interest rate cuts.