- GDP grew 0.6% in the first quarter of 2026 – the fastest growth since the same quarter last year
- March delivered 0.3% growth despite the first impacts of the Iran war
- But growth for both January and February was revised down
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“Whilst it’s evident the impact of higher prices driven by the Iran war will take time to weave its way into the UK’s economic fabric, it would be churlish not to highlight the surprising resilience of the country’s economy in the midst of geopolitical turmoil.
“After months of pre-budget speculation dampened sentiment in the second half of 2025, businesses had brushed themselves off, swallowed increased costs and started to feel more optimistic about the path forward.
“Households were spending a little bit more, and though a lot of that spend had to be diverted to cover the rising price at the pump, that also gave some motorists a nudge to splash out on an EV as they faced up to another energy shock.
“All sectors were delivering growth, though it’s notable that the construction sector only managed to partially reverse previous declines and that new building, particularly new house building, was still falling back.
“Concern about the potential path of interest rates and the impact that could have on affordability once more will continue to give housebuilders pause, especially as the price of materials shoots up once again.
“And the production sector is still finding momentum from the return to normal service after last year’s cyber-attack which crippled much of the UK’s motor vehicle supply chain.
“The dominant service sector has once again powered this chapter of UK growth, but there were areas of weakness, most notably amongst recruitment agencies as the labour market continued to look weak.
“For the current chancellor it is a moment to look back at past choices and to consider that many policy changes don’t have an immediate impact on growth or sentiment and with the wagons circling around Downing Street there are questions about whether those changes will really have time to bed in.
“But with inflation already hotting up and life expected to become more uncomfortable for us all in the coming months, this year’s early momentum might disappear as quickly as it did in 2025.”
