Led by services, UK economy grows 0.6% in 1st quarter

The UK economy grew 0.6% in the three months to March 2026, supported mainly by a strong expansion in services, the Office for National Statistics (ONS) said Thursday.

Real gross domestic product (GDP) rose 0.6% in the first quarter compared with the three months to December 2025, after growth of 0.5% in the three months to February and 0.4% in the three months to January.

Services output, the largest part of the UK economy, grew 0.8% in the three months to March and made the biggest contribution to overall GDP growth.

Production output rose 0.2% over the same period, while construction output increased 0.4%, marking a return to growth after five consecutive three-month declines.

The office said GDP was 1% higher in the three months to March compared with the same period a year earlier.

In services, 11 of 14 subsectors expanded in the three months to March. The largest positive contribution came from wholesale and retail trade; repair of motor vehicles and motorcycles, which rose 2%, its strongest three-monthly growth since August 2021.

Information and communication output increased 1.7%, driven by growth in computer programming, consultancy and related activities, as well as publishing. Professional, scientific and technical activities rose 1.2%.

These gains were partly offset by a 1% fall in administrative and support service activities and a 0.9% decline in arts, entertainment and recreation.

Consumer-facing services grew 0.8% in the three months to March, supported by retail trade, food and beverage services, and other personal service activities.

Production output’s 0.2% quarterly rise was mainly driven by a 0.8% increase in manufacturing and a 0.6% gain in electricity, gas, steam and air conditioning supply. These were partly offset by declines in mining and quarrying, and water supply.

Manufacturing growth was led by transport equipment, which rose 5.7%, partly reflecting a base effect after disruption from a cyber incident in August 2025.

Construction output increased 0.4% in the quarter, as repair and maintenance grew 3.4%, offsetting a 1.9% fall in new work. Private housing repair and maintenance made the largest positive contribution, while private new housing was the largest drag.

On a monthly basis, GDP grew 0.3% in March after expanding 0.4% in February and showing no growth in January.

The statistics agency said businesses across several industries cited the conflict in Iran as affecting March activity, with some reporting reduced turnover and others saying activity had been brought forward in anticipation of higher costs.