The UK economy grew by 0.6% in the first three months of 2026, according to the latest figures released by the Office for National Statistics (ONS).
The stronger-than-expected performance comes despite growing uncertainty around the global economy and rising concerns over the ongoing Iran conflict and disruption to international supply chains.
New data published on Thursday morning showed the economy also grew by 0.3% in March alone, outperforming forecasts from economists who had expected a contraction of between 0.1% and 0.2%.
The ONS said growth during the first quarter was largely driven by the services sector, which increased by 0.8%. Production output also edged up by 0.2%, while construction output grew by 0.4%.
Within the services sector, some of the strongest performing industries included wholesale and retail trade, alongside repair of motor vehicles and motorcycles, which rose by 2.0%. Information and communication activities increased by 1.7%, while professional, scientific and technical activities grew by 1.2%.
Looking specifically at March, services output rose by 0.3% and construction output increased by 1.5%, although production output fell slightly by 0.2%.
Commenting on the latest figures, ONS Director of Economic Statistics Liz McKeown said:
“Growth picked up in the first quarter of the year, led by broad-based increases across the services sector. Within that wholesale, computer programming and advertising performed particularly well.
“Production also grew slightly, while construction returned to growth, though only partly reversing weakness at the end of last year.”
Business groups have welcomed the stronger growth figures but warned that the economic outlook remains uncertain as geopolitical tensions continue to impact global markets.
Ben Jones, CBI Senior Lead Economist, said:
“The rebound in GDP growth in the first quarter looks unusually strong, largely reflecting February’s outsized gain. This pace of growth is unlikely to be sustained, particularly as the effects of the Iran conflict begin to be felt.
“With higher fuel and energy costs feeding through and disruption to global supply chains set to intensify the longer the Strait of Hormuz remains closed, pressures on businesses will mount, creating headwinds that are likely to weigh on growth through the remainder of 2026.”
“As the economic impact of the conflict becomes clearer, businesses will be looking to government to take further action to tackle the cost of doing business. This includes taking policy-related costs off business electricity bills, tangibly cutting the regulatory burden, and finding appropriate landing zones on the Employment Rights Act.”
