UK economy grows 0.7% - what does it mean for households and businesses?

These figures suggest Labour’s focus on stability might be starting to pay off. One quarter does not prove the strategy, but 0.7% growth is an encouraging sign. The Budget should build on that with predictable taxes and a clear plan that gives businesses confidence to invest and hire. For households, growth only becomes real when wages stretch further and jobs feel more secure. For businesses, it means stronger demand and the confidence to expand. Services are doing the heavy lifting, while construction’s decline shows the recovery remains uneven. Stronger growth does not guarantee cheaper mortgages: inflation will still shape interest rate decisions. Labour has grounds for encouragement. The next test is turning better GDP figures into better living standards.

Following the recent base rate rise, if the economy grows and unemployment doesn’t rise there is little reason for the Bank of England to consider rate cuts until inflation is firmly under control. Even if we see a resolution to the conflict in the Middle East we may see higher rates for longer.

Growth of 0.7% is encouraging and certainly better than the stagnation many households and businesses have become used to, but one strong quarter does not suddenly make people feel wealthier. Mortgage costs, energy bills and wider household expenses are still doing most of the talking at kitchen-table level.

For borrowers, stronger growth is a mixed blessing. A healthier economy should support jobs and confidence, but if growth remains resilient while inflation is still elevated, the Bank of England has less reason to rush into cutting rates. For businesses, the most important thing now is whether this growth proves sustainable rather than being followed by another stop-start period.

It's great to see some good numbers coming through on growth. It's essential for the UK's economic health and tax revenues, and the Government's own growth agenda.

We might finally see an end to a seemingly ever increasing tax and Government debt burden. Light at the end of the tunnel?

However, it's still somewhat of a mixed bag with the decline in construction is a major concern. These are 'real' jobs, and it makes the Government's promise of 1.5 million new homes almost certain to fail.

The growth in services is great, especially as that's what the UK excels at. But I do worry this doesn’t necessarily translate into more jobs.

With AI increasingly doing work that would previously have required bums on seats, we risk finding ourselves in the challenging position of having a growing economy but fewer people in work.

And that's the real concern for our society. A potentially growing economy but with less jobs could create a widening economic and social divide for ordinary people.

The economy might be growing, but that doesn’t mean households are suddenly feeling richer. GDP is a measure of economic activity, not how much money people have left after paying their bills. For families facing higher mortgage payments, food and energy costs, these figures may feel a world away from everyday life. Growth is welcome, but with interest rates now at 4% and inflation still stubbornly high, stronger GDP makes further rate cuts less likely in the short term. More economic activity can create jobs and opportunities, but businesses need confidence before they start hiring. The contrast between growing services and shrinking construction is telling. Building projects need substantial investment, and higher borrowing costs make developers more cautious. The economy is recovering on paper, but the real test is whether people feel that recovery in their wages, job security and standard of living. Until then, a growing economy won’t necessarily feel like a better one.

The economy grew 0.7%, and the one part of it going backwards is the part that builds houses. Construction fell 0.7% in the same three months, and there’s no surprise why. Builders don’t start homes that buyers can’t get a mortgage on. Growth won’t help either. A services sector growing at 0.9% gives the Bank of England every excuse to keep rates where they are. Barratt Redrow and Berkeley have both pulled back on buying land, and land not bought today is homes not built years from now. This Government promised to get Britain building. I expect construction to keep shrinking well into next year.