UK GDP Growth Q1 2026: Economy Expands 0.6% as Services Sector Leads Recovery

Note: This section contains information in English only.
Source: Dukascopy Bank SA
The United Kingdom's economy demonstrated a robust expansion in the first quarter of 2026, with real gross domestic product increasing by an estimated 0.6%. This performance marks a significant acceleration from the 0.2% growth recorded in the final quarter of 2025 and indicates a strengthening economic trajectory. The upturn was broadly supported across all primary sectors, led by a strong 0.8% increase in services that was heavily influenced by activity in the wholesale and retail trade. While the construction and production sectors also contributed to the overall growth, their gains were partially tempered by a decline in new building projects and a contraction in the mining and quarrying industry.



From an expenditure perspective, growth was primarily sustained by resilient household and government consumption, which effectively offset a 0.6% decline in gross fixed capital formation. The income data further supports this positive outlook, with nominal GDP rising by 1.6% alongside a steady increase in employee compensation. Notably, living standards showed improvement as real GDP per head rose by 0.6% during the quarter.

However, the broader economic environment continues to face domestic inflationary pressures, evidenced by a 3.5% annual increase in the implied GDP deflator, and a trade deficit that reached 0.9% of nominal GDP. Overall, the Q1 2026 data represents a promising start to the year compared to the more modest growth rates seen in 2024 and 2025
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