UK Business Investment Falls Less Than Expected

Business investment in the United Kingdom increased by 0.9% quarter-on-quarter in the three months to March 2026, slightly above the preliminary estimate of 0.7% and rebounding from an upwardly revised 3.0% decline in the previous period. While the latest reading pointed to a still-fragile recovery in corporate spending, the improvement was largely driven by a strong rebound in investment in transport equipment, ICT equipment, and other machinery and equipment, alongside increased spending on other buildings and structures. In contrast, investment in intellectual property products declined during the period. On an annual basis, business investment fell by 1.3%, a smaller decline than the preliminary estimate of 1.8%, but a reversal from the 1.8% growth recorded in the three months to December 2025. Meanwhile, overall gross fixed capital formation rose by 0.4% quarter-on-quarter and was up 1.6% compared with the same period a year earlier.

Business investment in the United Kingdom rose by 0.7% quarter-on-quarter in the three months to March 2026, rebounding from an upwardly revised 2.9% drop in the previous period, preliminary estimates showed. Still, the latest reading came in well below market expectations of a 1.1% increase and marked the weakest growth since the second quarter of 2023, highlighting a still-fragile recovery in corporate spending. The increase was largely driven by a significant rise in spending on transport equipment, while investment declined mainly in intellectual property products. On an annual basis, business investment fell by 1.8% in the first quarter, marking the first annual contraction in two years and reversing from a downwardly revised 1.8% gain in the fourth quarter. Meanwhile, overall gross fixed capital formation increased by 4.3% quarter-on-quarter and 0.5% annually.

Business investment in the United Kingdom fell by 2.5% quarter-on-quarter in the three months to December 2025, a smaller decline than the preliminary estimate of 2.7%, but reversing from a downwardly revised 1.1% increase in the previous period. The latest figure also marked the sharpest contraction since the third quarter of 2023, pointing to a clear slowdown in corporate spending. On an annual basis, business investment rose by 2%, in line with initial estimates, though this was the weakest growth since the second quarter of 2024 and a notable slowdown from the upwardly revised 3.5% expansion in the prior period. Meanwhile, overall gross fixed capital formation edged up by just 0.2%, easing from 1.2% growth previously, largely weighed down by a steep 18.2% drop in transport equipment.