The UK economy recorded its strongest quarterly growth in a year during the first three months of 2026, according to new figures, defying expectations despite global uncertainty triggered by conflict in the Middle East.
Data from the Office for National Statistics showed gross domestic product rose by 0.6% between January and March. The figure exceeded economists’ expectations of 0.5% and marks the fastest growth since the first quarter of 2025. The figures also showed stronger-than-expected growth in March alone, with GDP rising by 0.3%. Analysts had anticipated a slowdown following the onset of the Iran conflict, but instead several sectors reported increased activity.
Chancellor Rachel Reeves said the figures showed the economy was in a resilient position, but warned against political instability. She said in a statement: “Now is not the time to put our economic stability at risk. To do so would leave families and businesses worse off. Instead, this Government is getting on with the job of building an economy that is stronger, more resilient and prepared for the future.”
Growth in the first quarter was driven largely by the services sector, with additional contributions from manufacturing and construction, the ONS said. Within services, industries such as wholesale, computer programming and advertising performed particularly strongly, reports PA.
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. Production also grew slightly, while construction returned to growth, though only partly reversing weakness at the end of last year.”
However, economists cautioned that the robust figures may partly reflect a trend known as 'front loading', with businesses and consumers bringing forward activity in anticipation of rising costs and potential supply disruptions linked to the conflict. The ONS said several industries cited the Iran war as influencing behaviour, including manufacturing, car sales and rental firms, while retailers reported increased fuel purchases as motorists responded to rising prices.
Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, warned the strong start to the year may not be sustained. “This strong first quarter is probably the high point for the economy this year, with output likely to halve in the second quarter as surging energy costs suffocate activity, despite a short-term boost from firms stockpiling in anticipation of shortages and price rises.”
Chief Secretary to the Treasury James Murray highlighted the UK’s international performance, telling the BBC: “These figures about economic growth are strong figures and it shows that we’ve had the strongest growing economy in the G7 in the first quarter of this year.”
Comparisons with other major economies show the UK outpaced its peers over the period, with GDP growth higher than the United States (0.5%), Canada (0.4%), Germany (0.3%), Italy (0.2%) and France (0.0%). Figures for Japan are yet to be confirmed, though growth is forecast at around 0.4%.
Despite the strong quarterly performance, annual growth in the UK remains mixed. GDP is estimated to have grown by 1.0% in the year to March, below the United States (2.7%) and France (1.1%), but ahead of Italy (0.7%), Canada (0.6%) and Germany (0.3%). The ONS also revised earlier data, showing no growth in January and a slight downgrade for February, while the final quarter of 2025 was revised up to 0.2%.
While the latest figures point to resilience amid global pressures, economists warn that rising energy costs and ongoing geopolitical uncertainty could weigh on growth in the months ahead.
