Business news live: UK economy grew 0.7% and financial advice rules get ‘once in a generation’ overhaul

From January to March of this year, the UK economy grew 0.7 per cent – in large part supported by production and services.

It’s already expected that a slowdown is to be seen for April, and a lot has happened since then – tariffs, Middle East missiles, trade deals, inflation and more – but Thomas Pugh, chief economist at RSM UK, still expects overall annual growth to come in positive.

“There will be an inevitable slowdown in Q2 (April-June), but we think underlying growth is still positive and expect annual growth of a little over 1 per cent.

“Although headline growth remained at 0.7 per cent at the start of the year, there was a significant change in the drivers of growth. Consumer spending was revised up while total investment was revised down from 2.9 per cent to 2.0 per cent. This makes sense, as the huge jump in the saving rate had seemed at odds with strengthening consumer confidence and the improvement in consumer-facing services.

“Looking ahead, Q2 will look substantially worse than Q1 as there is some payback from activity brought forward to avoid taxes and tariffs. We are expecting growth of 0.2 per cent q/q, but underlying growth remains positive. The big question now is whether the recent string of weak data in retail sales and employment is a one-off, due to the initial shock of tax increases and tariffs, or whether it’s the start of a new trend. We suspect it’s more likely to be the former. Now that uncertainty has started to recede, consumer confidence is rebounding, and business surveys point to the worst of the labour market pain being behind us.

“That said, the economy is facing more headwinds in the second half of the year than it did in Q1, uncertainty remains elevated, inflation will be around 3.5 per cent and wage growth will probably slow further.

“That means growth is unlikely to get back to the heady heights of Q1’s 0.7 per cent anytime soon. Overall, we expect growth of around 1.2 per cent this year.”

Good morning all and welcome to another week in the world of business and finance.

Lots to look at across the week and we’re starting with the UK economy after the latest figures emerged.

Hope you had a good weekend – let’s get back into it.