UK economy surprises with strong February growth

What happened: The UK economy grew by 0.6% in Q1 2023, driven by a strong 0.6% expansion in March, led by retailing and construction. This follows a surprise 0.5% growth in February, beating economists' expectations. However, this growth comes amidst concerns about the impact of the Iran war on the economy.

Market impact: The robust growth has boosted investor confidence, with UK-focused funds and retail stocks likely to benefit. However, the positive data may also influence the Bank of England's monetary policy decisions, potentially impacting financials and fixed-income securities.

What to watch next: The next GDP estimate for Q1 (May 12) will confirm if the growth momentum continues. Additionally, the Bank of England's interest rate decision (May 11) will reveal how they respond to the strong growth data, setting the tone for UK markets.