Much remains to be tackled to safeguard the economy’s futurepublished at 09:05 BST
Dharshini David
Deputy economics editor
These GDP numbers are a glimpse of the past, and may well have been the calm before the storm – the economy is likely to have been buffeted since by the fallout from the war in the Middle East, and now faces the renewed challenges of political uncertainty. And numbers are always prone to revision.
But they matter – first, as they point to greater resilience in some key sectors, such as some parts of the services and the construction sector, than some had feared. And that always bodes well for profits and hiring.
Second, as the stronger activity, the greater the tax take tends to be – which is valuable for public finances.
And third because, in a world of rising costs, they give the Bank of England more scope to raise interest rates – if they fear the inflation outlook is getting too risky.
But there remains much to be tackled, by whoever is in Number 10 and 11 Downing Street in the coming months, to safeguard the future property.
Consumer-facing services, such as retail, remain smaller as a sector for example than a few years ago and joblessness, especially among the young, remains a key obstacle to many people feeling better off.
Navigating the shock waves triggered by a war thousands of miles away will be only part of the challenge.