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UK Economic Growth Picks Up in First Quarter on Services Boost

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UK Economic Growth Picks Up in First Quarter on Services Boost

The British economy grew in the first three months of 2026 as every output sector contributed to the quarterly gains, particularly the services segment.

The UK's real gross domestic product edged up 0.6% in the quarter ended March, following a revised 0.2% expansion in the prior three-month period, according to preliminary data from the Office for National Statistics published Thursday. The latest figure matched the consensus estimate.

On a yearly basis, the economy grew 1.1% in the quarter, compared with a 1% increase in the last three months of 2025 and the expected 0.8% gain.

"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," ONS Director of Economic Statistics Liz McKeown said.

ONS data showed that quarterly output in the services sector was up 0.8%, with 11 of the 14 subsectors contributing positively to growth. The production sector grew by 0.2%, primarily due to a 0.6% increase in electricity, gas, steam and air conditioning supply and a 0.8% gain in manufacturing. Meanwhile, construction output ticked up by 0.4%, supported by an increase in repair and maintenance, namely within private housing.

In March 2026 alone, the UK's GDP rose 0.3% month over month, against the downwardly revised 0.4% growth a month before and the expected 0.1% decline, according to Investing.com data.

"Ever since 2022, the UK economy has grown much faster in the first quarter than in the rest of the year. And 2026 looks like it'll be no different," ING said in a note. "That brings us to the key point, which is that the direction of the UK economy this summer has clearly changed for the worse over the past few weeks. Admittedly, a strong GDP reading for March sets a decent base for the second quarter; growth is likely to come in around 0.2-0.3%, before likely turning negative in the third quarter."

ING added that the data "won't change much" for the Bank of England, saying the central bank remains focused on the "impending inflation spike and the risk of it spilling into wage growth." ING expects a "one-and-done" rate increase in June.

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