The UK economy expanded by 0.3% in March, surpassing analysts' expectations of a slight contraction, according to official figures from the Office for National Statistics (ONS).

This growth occurred despite the initial economic impacts from the Iran war, including rising fuel prices following the closure of the Strait of Hormuz.Over the first quarter of the year, GDP increased by 0.6%, driven by rebounds in retailing, construction, wholesale, computer programming, and advertising sectors.

Retailers noted increased fuel stockpiling by motorists amid sharp price rises, suggesting some 'front loading' of activity by businesses and consumers ahead of potential shortages.

However, economists anticipate weaker growth in the coming months as the full effects of the conflict materialise, with higher energy, petrol, and food costs squeezing household incomes.

Chancellor Rachel Reeves highlighted the strong growth as enabling further support for families and businesses, while cautioning against political instability.In contrast, the Shadow Chancellor criticised Labour's internal leadership issues for destabilising the economy.Construction returned to growth, though partially offsetting prior weakness.

Analysts like those from KPMG and Capital Economics warn that the second quarter could see more pronounced negative impacts, potentially leading to dampened demand or even a mild recession.Previous months' figures were revised slightly downwards.Business owners, such as those running a play centre in Essex, reported tighter family budgets affecting discretionary spending.GDP data remains subject to future revisions.