Wage growth in the UK declined in the first quarter of the year, with annual growth of weekly earnings excluding bonuses standing at 5.6% in March compared to 5.9% in February, according to data released by the Office for National Statistics on Tuesday. However, this decline was in line with analysts’ expectations. Separate figures showed employment fell by 0.2% between February and March as companies start to deal with the effect of rises in the cost of employment, such as higher national insurance contributions and a rise in the minimum wage. The decrease in employment was most acutely felt in the retail and hospitality sectors.
Separate figures showed employment fell by 0.2% between February and March as companies start to deal with the effect of rises in the cost of employment, such as higher national insurance contributions and a rise in the minimum wage.
The UK economy grew faster than expected over the first quarter of 2025, as GDP rose 0.7%, above economists’ expectations of 0.6% and the 0.1% growth in the final quarter of 2024. The increase could be mostly attributed to the services sector and net trade, which suggested companies had moved activity to try to get ahead of US tariffs. However, despite the positive data, swap markets still anticipate up to two more rate cuts by the Bank of England this year, as the central bank emphasised last week that the effects of tariffs are yet to be felt and they anticipate economic growth will slow again.
The UK economy grew faster than expected over the first quarter of 2025, as GDP rose 0.7%, above economists’ expectations of 0.6% and the 0.1% growth in the final quarter of 2024.
Despite reaching a trade deal last week, UK officials say lower US tariffs on British steel, aluminium, and car exports are unlikely to take effect for weeks. An agreement had been reached to remove tariffs from steel and aluminium, and levies on car exports of 100,000 per year reduced to 10%. However, officials are now in talks over how much steel and aluminium would be exempted from the 25% global tariff. UK aerospace had also been assured it would no longer be subject to tariffs, but with nothing yet in writing, industry executives said they needed “reassurance” that the tariff exemption would materialise.
Our specialist's final thought
"An agreement had been reached to remove tariffs from steel and aluminium, and levies on car exports of 100,000 per year reduced to 10%. However, officials are now in talks over how much steel and aluminium would be exempted from the 25% global tariff."
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