Q1 growth ‘as good as it gets’
Responding to the latest growth figures, Julian Jessop, economics fellow at the Institute of Economic Affairs: “The first official estimate confirmed that the UK economy made a flying start to 2026, but we have been here before: the first quarter has seen the strongest growth in each of last four years, followed by a marked slowdown.
“This may partly reflect some problems with the seasonal adjustments, which have been acknowledged by the Office for National Statistics. Nonetheless, the earlier improvements in many business and consumer surveys suggest that most of the 0.6% increase in GDP was genuine.
“Unfortunately, the same indicators are already pointing to a much weaker second quarter as the fallout from the crisis in the Middle East starts to hit. The decent growth in the first quarter will be as good as it gets.
“For now, manufacturing and most services appear to be holding up well, perhaps benefitting from demand brought forward to beat the expected supply shortages and price rises.
“But activity in key sectors such as retail, construction, and the housing market, is starting to weaken sharply, and confidence is fragile.
“The mounting political uncertainty at home will not help either. Nervousness in the financial markets over the fate of the prime minister is adding to the upward pressure on borrowing costs. The lack of any meaningful measures to boost growth in the King’s Speech is a worry too. Instead, the government chose to double down on clumsy state interventions which are holding the economy back.”