UK economy grows 0.6% in Q1, led by services, household spending

Economy expands for 2nd straight quarter as services output rises, construction and production post modest gains

The UK economy expanded by an unrevised 0.6% in the first quarter of 2026, matching estimates, helped by services and household spending, official data showed Tuesday. Real gross domestic product (GDP) rose 0.6% in January-March, following a revised 0.1% increase in the final quarter of 2025, the Office for National Statistics (ONS) said in its quarterly national accounts. The latest growth was driven by increases across all three main sectors of the economy, with services making the largest contribution. Services output grew 0.8% in the first quarter, while construction and production both rose 0.2%. Within services, professional, scientific and technical activities increased 2.3%, while wholesale and retail trade and repair of motor vehicles and motorcycles rose 1.8%. The ONS said output increased in 15 of 20 subsectors of GDP during the quarter. On the expenditure side, growth was mainly supported by household consumption, government consumption, and gross capital formation. Real household final consumption expenditure rose 0.6% in the first quarter, while real government consumption climbed 1.3%. Gross fixed capital formation grew 0.4%, revised up from an initial estimate showing a 0.6% fall. The data also showed that real GDP per head increased 0.6% in the first quarter and was 0.7% higher than a year earlier. However, real household disposable income per capita fell 0.8% in the first quarter after rising 1.2% in the previous quarter. The household saving ratio also dropped 0.7 percentage points to 8.9%, driven by a fall in non-pension saving. The ONS revised annual GDP growth for 2025 down to 1.3% from 1.4%, while growth for 2024 was left unchanged at 1.0%. Nominal GDP increased 1.7% in the first quarter and was 4.4% higher than a year earlier. The UK’s trade deficit in goods and services was estimated at 1.9% of nominal GDP in the first quarter. Excluding non-monetary gold and other precious metals, the deficit stood at 1.0% of GDP.