UK economic growth held up better than expected in the first quarter of 2026, with GDP expanding 0.6% qoq in line with forecasts as stronger services activity helped offset softer industrial momentum. The figures suggest the economy entered the second quarter with more resilience than many investors had feared, despite elevated energy costs and rising political uncertainty surrounding Prime Minister Keir Starmer’s government.
Services remained the main engine of growth. Output in the sector increased 0.8% qoq following a 0.2% rise in the previous quarter and stood 1.4% higher than a year earlier. Production output also expanded by 0.2% qoq after a strong 1.3% gain in Quarter 4 2025, though annual production growth remained flat. Construction activity rose 0.4% qoq but was still -1.3% lower than the same period last year. Meanwhile, real GDP per head increased 0.6% qoq during the quarter and was up 0.9% yoy.
Monthly data for March surprised to the upside. UK GDP grew 0.3% mom versus expectations for a -0.1% mom contraction, following February’s 0.4% expansion. Services output rose 0.3% while construction surged 1.5%, offsetting a modest -0.2% decline in production activity.
The stronger-than-expected figures may provide some reassurance to policymakers that the UK economy retains underlying resilience even as higher energy prices, rising gilt yields, and domestic political instability continue clouding the broader outlook.
| Indicator | Previous | Latest | Expectation |
|---|---|---|---|
| UK GDP (Q1 QoQ) | 0.2% | 0.6% | 0.6% |
| Services Output | 0.8% | ||
| Production Output | 0.2% | ||
| Construction Output | 0.4% | ||
| Real GDP Per Head | 0.6% | ||
| UK GDP (March MoM) | 0.4% | 0.3% | -0.1% |
| Services Output | 0.3% | ||
| Construction Output | 1.5% | ||
| Production Output | -0.2% |
