UK becomes fastest-growing G7 economy after strong first quarter

LONDON (AP) — The British economy grew at its fastest rate in a year during the first quarter of 2025, official figures showed Thursday, in a welcome boost to the Labour government, which has made lifting the country's growth its top priority.

The Office for National Statistics said growth, as measured by gross domestic product, increased by 0.7% in the first quarter of the year from the final three months of 2024, with the country's dominant services sector doing particularly well.

The first quarter increase makes the British economy the fastest-growing among the Group of Seven leading industrial nations.

Growth was modestly ahead of market expectations for a 0.6% increase. It was also the biggest increase since the first quarter of 2024, when the economy expanded by 0.9%.

Treasury chief Rachel Reeves welcomed the growth leap, and said the figures showed the choices made by Labour since it was elected last July were beginning to pay off.

“We’re set to be the fastest growing economy in the G-7 in the first three months of this year and that’s incredibly welcome, but I know that there is more to do," she said while on a visit to a Rolls-Royce factory in Derby, northern England.

Most economists think is likely to slow down in the second quarter of the year, partly because of the global uncertainty generated by U.S. President Donald Trump's tariff policies.

Though most tariffs were paused for 90 days following the ensuing market turmoil, including the 10% baseline tariff applied to U.K. goods entering the U.S., the backdrop for the global economy remains highly uncertain, particularly if the U.S.-China trade war persists.

Some of that uncertainty, with regard to the British economy, lifted Thursday when both Trump and British Prime Minister Keir Starmer separately outlined details of a trade deal between the U.S. and the U.K. Though Trump kept the 10% baseline tariffs on U.K., he agreed to reduce the levies on British autos, steel and aluminum.

Sanjay Raja, chief U.K. economist at Deutsche Bank, said the growth uptick will likely be short-lived, especially during the second quarter when trade uncertainty will be at its peak.

“Exporters will likely see reduced demand as well from higher U.S. tariffs and weaker global demand,” he said.

Economists said growth will likely falter in the second quarter as new taxes on business were imposed in April. Also a raft of price rises during the month, including domestic energy and water bills, are expected to keep a lid on consumer demand.

Britain's Chancellor of the Exchequer Rachel Reeves speaks with the media at the Rolls-Royce factory in Derby, England following the announcement from the Office for National Statistics that the U.K. economy grew by 0.7% between January and March, Thursday, May 15, 2025. (Darren Staples/PA via AP)

Britain's Chancellor of the Exchequer Rachel Reeves, right, speaks with the media at the Rolls-Royce factory in Derby, England following the announcement from the Office for National Statistics that the U.K. economy grew by 0.7% between January and March, Thursday, May 15, 2025. (Darren Staples/PA via AP)

Britain's Chancellor of the Exchequer Rachel Reeves, center, speaks with the media at the Rolls-Royce factory in Derby, England following the announcement from the Office for National Statistics that the U.K. economy grew by 0.7% between January and March, Thursday, May 15, 2025. (Darren Staples/PA via AP)

Britain's Chancellor of the Exchequer Rachel Reeves, center, speaks with the media at the Rolls-Royce factory in Derby, England following the announcement from the Office for National Statistics that the U.K. economy grew by 0.7% between January and March, Thursday, May 15, 2025. (Darren Staples/PA via AP)

LONDON (AP) — Laws that will make it illegal to create online sexual images of someone without their consent are coming into force soon in the U.K., officials said Thursday, following a global backlash over the use of Elon Musk's artificial intelligence chatbot Grok to make sexualized deepfakes of women and children.

Musk's company, xAI, announced late Wednesday that it has introduced measures to prevent Grok from allowing the editing of photos of real people to portray them in revealing clothing in places where that is illegal.

British Prime Minister Keir Starmer welcomed the move, and said X must “immediately” ensure full compliance with U.K. law. He stressed that his government will remain vigilant on any transgressions by Grok and its users.

“Free speech is not the freedom to violate consent," Starmer said Thursday. “I am glad that action has now been taken. But we’re not going to let this go. We will continue because this is a values argument.”

The chatbot, developed by Musk's company xAI and freely accessed through his social media platform X, has faced global scrutiny after it emerged that it was used in recent weeks to generate thousands of images that “undress” people without their consent. The digitally-altered pictures included nude images as well as depictions of women and children in bikinis or in sexually explicit poses.

Critics have said laws regulating generative AI tools are long overdue, and that the U.K. legal changes should have been brought into force much sooner.

A look at the problem and how the U.K. aims to tackle it:

Britain's media regulator has launched an investigation into whether X has breached U.K. laws over the Grok-generated images of children being sexualized or people being undressed. The watchdog, Ofcom, said such images — and similar productions made by other AI models — may amount to pornography or child sexual abuse material.

The problem stemmed from the launch last year of Grok Imagine, an AI image generator that allows users to create videos and pictures by typing in text prompts. It includes a so-called “spicy mode” that can generate adult content.

Technology Secretary Liz Kendall cited a report from the internet Watch Foundation saying the deepfake images included sexualization of 11-year-olds and women subjected to physical abuse.

“The content which has circulated on X is vile. It is not just an affront to decent society, it is illegal,” she said.

Authorities said they are making legal changes to criminalize those who use or supply “nudification” tools.

First, the government says it is fast-tracking provisions in the Data (Use and Access) Act making it a criminal offense to create or request deepfake images. The act was passed by Parliament last year, but had not yet been brought into force.

The legislation is set to come into effect on Feb. 6

“Let this be a clear message to every cowardly perpetrator hiding behind a screen: you will be stopped and when you are, make no mistake that you will face the full force of the law,” Justice Secretary David Lammy said

Separately, the government said it is also criminalizing “nudification” apps as part of the Crime and Policing Bill, which is currently going through Parliament.

The new criminal offense will make it illegal for companies to supply tools designed to create non-consensual intimate images. Kendall said this would “target the problem at its source.”

The investigation by Ofcom is ongoing. Kendall said X could face a fine of up to 10% of its qualifying global revenue depending on the investigation’s outcome and a possible court order blocking access to the site.

Starmer has faced calls for his government to stop using X. Downing Street said this week it was keeping its presence on the platform “under review."

Musk insisted Grok complied with the law. “When asked to generate images, it will refuse to produce anything illegal, as the operating principle for Grok is to obey the laws of any given country or state,” he posted on X. “There may be times when adversarial hacking of Grok prompts does something unexpected. If that happens, we fix the bug immediately.”

FILE - Workers install lighting on an "X" sign atop the company headquarters, formerly known as Twitter, in downtown San Francisco, July 28, 2023. (AP Photo/Noah Berger, File)