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By Niket Nishant

May 14 (Reuters) - UK shares rose on Thursday, as strong

economic growth in the first quarter reassured investors shaken

by the country's political uncertainty.

Prime Minister Keir Starmer faced the increasing prospect of a

leadership challenge, ​with his health minister reportedly ready

to resign and his former deputy calling on him to "reflect" on

his position.

The blue-chip FTSE 100 index rose 0.39%, as of 11:09

am GMT, while the mid-cap FTSE 250 climbed 0.71%.

Britain's economy grew unexpectedly in March, data showed on

Thursday, to cap another strong first quarter, suggesting it was

in better shape than many feared after the economy barely grew

in the fourth quarter of last year.

However, some analysts warned that figures may have been

skewed by the stockpiling of goods that businesses fear will

become more expensive due to supply chain disruptions stemming

from the Middle East conflict.

"We need to be cautious about judging the genuine trend,"

said Rob Wood, chief UK economist at Pantheon Macroeconomics.

George Brown, senior economist at Schroders, also said that

the economic strength may wane as the year progresses.

"UK GDP has developed a habit of starting the year well,

only for momentum to slow due to residual seasonality... That

should mean the Bank of England talks tough but stops short of

the hikes markets are pricing in."

Markets expect the central bank to raise rates at least two

times this year, according to data compiled by LSEG.

QUESTIONS REMAIN OVER STARMER'S FUTURE

Investors are worried that a potential successor to Starmer

might adopt a more left-wing stance and advocate for increased

spending, despite Britain's already strained finances.

Long-term British borrowing costs surged to their highest in

nearly 30 years earlier this week.

In an interview with Bloomberg TV, JPMorgan Chase ( JPM )

CEO Jamie Dimon warned that any move to hike taxes on banks in

the event Starmer is replaced would prompt the bank to scrap

plans to invest billions in a new London headquarters.

Among individual stocks, Legal and General ( LGGNF ) rose

6.16% and were the biggest gainers on the FTSE 100, after the

Financial Times reported that possible buying interest was

building in the company.

Auto stocks advanced 3.23%, countering a 3.00% slide in the

investment banking index, which was dragged down

by an 11.19% decline in 3i Group ( TGOPF ).

The investment firm's stock hit its lowest since May 2023 due to

a slowdown at discount retailer Action, its key portfolio

company.

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