The UK economy grew by 0.7% in the first quarter, making it the fastest-growing G7 country. However, analyst Danni Hewson warns that uncertainties stemming from tariff issues and tax hikes have caused many businesses to delay future plans and cut labor costs. The initial growth might be more of an anomaly rather than indicative of sustained economic expansion necessary for government revenue without further tax increases or spending cuts.
Confirmation that the UK economy delivered the fastest growth of any G7 country feels almost redundant. A mix of tariff woes and tax hikes has created a period of uncertainty.
Many businesses have simply pressed pause on their future plans, and in some cases taken the decision to cut labour costs in order to set them up for what might be down the tracks.
The early growth spurt looks set to be an anomaly rather than the sustained expansion the government needs to pad treasury coffers without tax rises or further cuts.
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