UK Economy Grew 0.6% in First Quarter of 2026

The UK economy expanded by 0.6 percent in the first quarter of 2026, according to official figures released on Thursday. The growth rate from January to March was notably higher than recent sluggish performance and occurred even as the Iran war intensified during the final month of the period.

BBC News reported that the economy has shown more resilience than many economists anticipated, including the IMF which had projected the UK would be the most affected major economy by the conflict. The data comes from the Office for National Statistics.

GDP per capita, which adjusts for population increases, also rose and recorded its fastest pace in four years. The improvement marks a change from recent years of stagnant living standards that followed the energy shock after Russia invaded Ukraine in 2022.

The latest per capita figure suggests average living standards improved during the quarter even as overall growth can be influenced by a rising population and workforce.

G7 nations affected by the Iran war, the UK has posted the strongest growth so far. Japan has not yet reported its data but is expected to show a lower figure. The IMF forecast last month that the UK would be the hardest hit economy in the group has not materialized in these initial results.

Household energy bills have been protected from sharp rises, and the UK has become less sensitive to gas price fluctuations in recent years. The current energy shock has centered more on oil than natural gas.

Growth occurred across services, construction and manufacturing. Wholesale and retail trade posted gains, pointing to resilient consumer spending. Professional scientific activities and information and communications also expanded, consistent with strong investment in the UK artificial intelligence and technology sector.

Other areas declined amid rising fuel and chemical costs. Machinery and equipment output fell, as did administrative services activities. House building is a sector to monitor given increases in fixed mortgage rates.

The most recent consumer confidence readings have fallen as rising fuel and mortgage costs take effect. Officials are hoping for an end to hostilities in the Gulf and reopening of the Strait of Hormuz to support continued recovery. While the economy showed signs of recovery at the start of the year, developments in the Gulf could still affect future performance.