United Kingdom GDP

Economic growth picks up in the first quarter of 2026

GDP reading: The United Kingdom's GDP increased 0.6% on a seasonally adjusted quarter-on-quarter basis in Q1, following a 0.2% expansion in the prior quarter. Q1's reading was the best since Q1 2024, and continued the post-pandemic trend of strong first quarters.

Broad-based improvement: Compared to the prior quarter's data, figures in Q1 improved for private consumption (+0.6% in seasonally adjusted quarter-on-quarter terms vs +0.1% in Q4), government consumption (+0.4% vs +0.1% in Q4) and exports of goods and services (+0.1% vs -0.3% in Q4). In contrast, the reading for fixed investment worsened in Q1 (-0.6% vs -0.1% in Q4). Finally, the variation in imports of goods and services was the same as in the prior quarter (+0.6% in Q1 and Q4). On a year-on-year basis, economic output expanded 1.1% in Q1, following a 1.0% expansion in the prior quarter.

Panelist insight: Caveating the latest data, ING’s James Smith said: “We just aren't convinced by the UK's first quarter growth performance. […] It follows a now-familiar pattern; since 2022, UK growth figures have come in much stronger in the first three months of the year than the rest. Growth has averaged 0.6% in Q1 over that period, a sharp contrast to Q3 where the economy has typically flatlined. Why? It’s hard to say exactly what’s happening. But it seems that something’s not quite right with the way the data is being seasonally-adjusted, a legacy we suspect of higher inflation and the timing of annual price hikes.” On the outlook, Goldman Sachs’ James Moberly said: “The firmer monthly figure for March results in a stronger starting point for the next quarter, which pushes up our GDP growth forecast for Q2 to +0.3%qoq (from +0.1%qoq). That said, we continue to expect the sequential pace to slow through the rest of the year given higher oil and gas prices, with previous studies suggesting that each 10% increase in energy prices lowers the level of output by 0.1-0.2% on average. We also see some downside risks to our baseline growth forecast for H2 given the pattern seen in recent years whereby a strong Q1 is followed by weaker data in subsequent quarters.”

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