UK economy grew 0.6% between January and March

The UK's economy grew by 0.6% in the three months to March, according to the latest official figures.

The Office for National Statistics (ONS) said growth had picked up in the first three months of the year, led by the dominant services sector.

Monthly figures show that the economy grew by 0.3% in March, which was stronger than expected for the first full month since the outbreak of the Iran war.

However, despite the good start to the year, analysts expect growth to weaken as the impact of the Iran conflict filters through to the economy.

The ONS said the boost to the services sector in the first three months of the year was driven in particular by strong performance in wholesale, computer programming and advertising.

Liz McKeown, the ONS's director of economic statistics, said the construction industry had also returned to growth, "though only partly reversing weakness at the end of last year".

Yael Selfin, KPMG's chief economist, said the impact of the Iran war on the economy was likely to be more pronounced in the second quarter of the year.

"Households are under renewed pressure as energy and petrol prices climb. Food costs are also expected to rise, with disruptions to fertilisers and other essential inputs," she said.

"These increases are likely to weigh on disposable incomes, dampening demand and posing a significant challenge to economic activity over the coming months."

GDP figures can be revised up or down in future months. While March's growth was higher than expected, the estimate for February was revised down from 0.5% to 0.4%, and January's was reduced from 0.1% to zero.

Responding to the latest figures, Chancellor Rachel Reeves said they showed the government had "the right economic plan".

"Now is not the time to put our economic stability at risk. To do so would leave families and business worse off, "she said.

"Instead, this government is getting on with the job of building an economy that is stronger, more resilient, and prepared for the future."

Mel Stride, the shadow chancellor, said Labour was "destabilising Britain's economy.

"This week, borrowing costs hit their highest level in 30 years as Labour leadership contenders competed to promise even more spending, borrowing and fantasy economics."

Luke Bartholomew, deputy chief economist at Aberdeen Investments, said the growth figures would not matter much to markets, "given how things have moved on since then".

"Higher energy prices will weigh on growth, stunting any recovery that might otherwise have been occurring," he said.

"And ongoing political uncertainty is likely to weigh on investment given the possibility of a significant change in fiscal policy."