FILE PHOTO – A view of the City of London, with the Royal Exchange and the Bank of England in the foreground. (zu dpa: «UK economy records strongest quarterly growth in a year») Christoph Meyer/dpa
The UK economy has recorded the strongest quarterly growth in a year over the first three months of 2026 with a surprise spurt in activity after the Iran war began, figures show.
Gross Domestic Product (GDP) increased by 0.6% between January and March, the Office for National Statistics (ONS) said.
This was higher than the 0.5% growth that most economists had been expecting, and marks the strongest since the first quarter of 2025 when GDP also increased by a revised 0.6%.
The ONS also said GDP increased by 0.3% in March, surprising economists who had been expecting growth to slow following the onset of the war in the Middle East.
Chancellor Rachel Reeves responded to the figures to warn against threatening the “stability” of the economy, amid uncertainty over British Prime Minister Keir Starmer’s future as leader.
She said in a statement: “The choices I have made as chancellor mean our economy is in a stronger position as we deal with the costs of the war in Iran.”
“Now is not the time to put our economic stability at risk.”
“To do so would leave families and business 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.”
The services industry delivered a boost to the economy during the first quarter, while manufacturing and construction output also increased, according to the ONS.
The ONS also made a series of revisions to previous datasets.
February’s growth figure was revised down to 0.4% in February, from the 0.5% previous estimate, and January’s was revised to show no growth, from a previous 0.1% increase.
GDP for the final quarter of 2025 was also revised up to 0.2% from the previous estimate of 0.1%.
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.”
However, some economists said the figures pointed to signs of so-called “front loading” in March, suggesting that businesses and consumers were bringing forward activity ahead of expected shortages in supply or price increases.
The ONS said a range of industries were citing the Iran war as a reason why activity was brought forward, including manufacturing, car sales and rental and leasing firms, while others said it had knocked sales in March.