UK Economy Contracts in April

The GDP in the UK contracted by 0.1% month-on-month in April 2026, in line with expectations and following a 0.3% expansion in March. This marked the first contraction since August last year, as the effects of the Middle East conflict began to ripple through the economy. Services output declined 0.2%, with the largest negative contributors being administrative and support service activities, which fell 2.2%, and arts, entertainment and recreation (-4.3%). Wholesale and retail trade, including motor vehicle repair, also declined 0.4%. On the other hand, information and communication provided the largest positive contribution, rising 1.1%. Meanwhile, production output was flat after a 0.2% decline in March, as gains in manufacturing and mining were offset by declines in utilities and water-related activities. In contrast, construction grew by 0.1%. On a yearly basis, GDP expanded 1.2%, the same pace as in March and slightly below a forecast of 1.3%.

The GDP in the UK expanded 0.3% month-on-month in March 2026, slowing from a downwardly revised 0.4% growth in February but defying expectations of a 0.2% contraction. Services were the main driver, rising 0.3%, led by information and communication, which grew 1.1% and extended four consecutive months of growth. Within the subsector, information service activities surged 6.0%, while computer programming, consultancy, and related activities increased 1.1%. Additional support came from accommodation and food services, up 1.3%, and human health and social work activities, which rose 0.4%. These gains were partly offset by a 0.2% decline in wholesale and retail trade, including motor vehicle repair. Elsewhere, construction grew 1.5%, while production fell 0.2%. On a yearly basis, GDP rose 1.2%, the strongest growth since July last year, accelerating from 1.0% in February and above forecasts of 0.7%.

The GDP in the UK expanded 0.5% month-on-month in February 2026, compared to expectations and January’s revised 0.1% growth. This marks the strongest growth since January 2024, with services rising 0.5% (vs +0.1% in January). The largest positive contribution came from administrative and support service activities (+2.0%), driven by a rebound in employment activities (+2.5%), alongside gains in wholesale and retail trade; repair of motor vehicles (+0.7%). These were partly offset by a 0.3% decline in accommodation and food services. Production also rose 0.5%, reversing prior declines, supported by mining and quarrying (+3.9%) and energy supply (+1.5%). Construction grew 1.0%, led by private housing. On a yearly basis, GDP expanded 1.0%, the strongest growth since September last year. The latest data precedes the Middle East escalation. As a net energy importer, the UK is exposed to global energy price shocks from disrupted oil and gas exports in the region.