LONDON, May 14 (Reuters) - Britain's economy expanded unexpectedly in March to cap another strong first quarter, suggesting the economy was in slightly better shape as the Iran war escalated than many feared, official data showed on Thursday.
Gross domestic product increased by 0.3% month-on-month in March, the Office for National Statistics (ONS) said, against expectations in a Reuters poll of economists for a 0.2% contraction.
The services sector, construction output and manufacturing all grew strongly.
"Many will be unconvinced that this momentum can be sustained throughout this year," said Scott Gardner, investment strategist at J.P. Morgan Personal Investing.
"The risk is that the energy price spike following the start of the Iran conflict will persist and lead to a rebound in inflation."
Recent business surveys point to a rapid increase in cost pressures that is likely to weigh on corporate activity.
For the first quarter as a whole, the economy expanded by 0.6% - marking the third year running of conspicuously strong growth in the first quarter.
The ONS on Thursday published a blog that acknowledged there may be post-pandemic shifts in the timing of spending in the economy, and nudged down its readings for the first quarters of 2024 and 2025.
Finance minister Rachel Reeves said the data showed she had the right economic plan.
(Reporting by Andy Bruce and Suban Abdulla; Editing by Muvija M and Paul Sandle)
