UK Q3 GDP Growth Confirmed at 0.1%

The UK economy expanded by 0.6% quarter-on-quarter in Q1 2026, confirming preliminary estimates and accelerating from a revised 0.1% growth in Q4. This marked the strongest quarterly expansion since Q1 2025. Services output, the main growth driver, rose by 0.8%, up from 0.1%, led by professional, scientific and technical activities (+2.3%) and wholesale and retail trade (+1.8%). Production output increased by 0.2%, supported by a 0.7% rise in manufacturing and a 1.2% increase in electricity, gas, steam, and air conditioning supply, partly offset by declines in mining and quarrying (-4.7%) and water supply (-0.7%). Construction also grew by 0.2%, as repair and maintenance increased 3.3%, while new work fell 2.1%. On a yearly basis, the UK economy expanded 0.9% in Q1, revised down from the preliminary estimate of 1.1% and matching the revised pace recorded in the previous period.

The UK economy expanded by 0.6% in Q1 2026, matching market expectations and marking the strongest growth since Q1 2025. This follows an upwardly revised 0.2% increase in the previous quarter. Services output, the main growth driver, rose by 0.8%, up from 0.2% in the prior period. The wholesale and retail trade sector led the gains, growing by 2.0%, with wholesale trade up 3.1% and retail trade up 1.6%. Production output increased by 0.2%, supported by a 0.8% rise in manufacturing and a 0.6% increase in electricity, gas, steam, and air conditioning supply, offsetting declines in mining, quarrying, and water supply sectors. Construction grew by 0.4%, as repair and maintenance surged by 3.4%, while new work fell by 1.9%. On the expenditure side, growth was driven by higher gross capital formation, household consumption, and government spending. Annually, the economy expanded by 1.1% in Q1 2026, exceeding the 0.8% forecast.

The British economy expanded 0.1% on quarter in the last three months of 2025, the same as in the previous quarter and in line with the preliminary estimate. The production sector led the growth, rising 1.2%, led by a 4% surge in manufacturing and repair and a 3.6% rise in machinery and equipment. On the other hand, the construction sector decreased by 2% and the services sector showed no growth, weighed down by a 1.4% drop in professional, scientific, and technical activities. On the expenditure side, increases were seen for household consumption (0.1%), led by transport, miscellaneous, housing, and clothing and footwear while net tourism made little contribution to growth; government spending (0.1%); gross fixed capital formation (0.2%) while business investment tumbles 2.5%. Exports were down 0.7% led by decreases in machinery and transport equipment, chemicals, material manufactures and fuels while imports went up 0.7%. Year-on-year, the GDP increased 1%.