Reeves: GDP figures show we have the right economic plan<\/p>\n
Chancellor Rachel Reeves can be forgiven for tooting her own trumpet this morning, after the UK economy grew faster than forecast in March.<\/p>\n
Following the news that GDP rose by 0.3% in March<\/a>, and by 0.6% in the first quarter of the year<\/a>, Reeves says:<\/p>\n double quotation markToday\u2019s strong growth figures show the Government has the right economic plan.<\/p>\n The choices I have made as Chancellor mean our economy is in a stronger position as we deal with the costs of the war in Iran.<\/p>\n Now is not the time to put our economic stability at risk.<\/p>\n That last sentence sounds like a reproachful glare towards her colleagues who are trying to push prime minister Keir Starmer out of Downing Street (which could lead to a change of chancellor too\u2026)<\/p>\n Share<\/a><\/p>\n Updated at\u00a002.19 EDT<\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n Experts: Q1 growth spurt may be as good as it gets in 2026<\/p>\n Several analysts are warning that Britain\u2019s pick-up in growth in January-March may be the best we see this year.<\/p>\n Ruth Gregory, deputy chief UK economist at Capital Economics, says she would be very surprised if growth doesn\u2019t weaken from May, adding:<\/p>\n double quotation markGDP rose by a bumper 0.6% q\/q in Q1 (consensus and CE forecast 0.6%), but this will be the high point for the year given the effects of the war in Iran will sap growth from Q2. In our baseline scenario, the economy doesn\u2019t grow at all in Q2 and Q3. Prolonged political instability is an extra downside risk to our forecasts.<\/p>\n Michael Brown, senior research strategist at brokerage Pepperstone, also suspects the 0.6% jump in GDP in Q1 will mark the peak in terms of UK growth this year:<\/p>\n double quotation markRisks remain clearly tilted to the downside moving forwards, principally as a result of the ongoing Middle East conflict, and subsequent surge in energy prices, which will in turn impact the economy in the manner of a significant negative demand shock, over the next couple of quarters.<\/p>\n Added to which, renewed political uncertainty in Westminster is also likely to act as a significant headwind to the economy at large, not only delaying major investment decisions, but with said uncertainty having also resulted in considerably tighter financial conditions as a result of the recent sell-off in Gilts across the curve.<\/p>\n Raj Badiani, economics director at S&P Global Market Intelligence, predicts the UK economy will shrink slightly later this year:<\/p>\n double quotation mark\u201cThe UK economy outperformed in the first quarter of this year with growth reaching 0.6% quarter over quarter, despite being at odds with lacklustre survey indicators during this period. This continues the recent pattern of unexpectedly strong growth in the first quarter of the year, while stockpiling of some goods ahead of anticipated shortages arising from the Iran war lifted demand in March.<\/p>\n \u201cNevertheless, recession risks have risen, and we now expect the UK economy to contract mildly in the second and third quarters of this year. The main driver is a prolonged energy price shock pushing headline inflation above 4.0% in the coming months, and the resulting pressure on the Bank of England to raise interest rates to counter emerging \u201csecond-round\u201d effects.<\/p>\n Share<\/a>Computer programming and advertising had strong growth in Q1<\/p>\n Here\u2019s ONS Director of Economic Statistics Liz McKeown on today\u2019s UK GDP report:<\/p>\n double quotation mark\u201cGrowth picked up in the first quarter of the year, led by broad-based increases across the services sector. Within that wholesale, computer programming and advertising performed particularly well.<\/p>\n \u201cProduction also grew slightly, while construction returned to growth, though only partly reversing weakness at the end of last year.\u201d<\/p>\n Share<\/a>Reeves: GDP figures show we have the right economic plan<\/p>\n Chancellor Rachel Reeves can be forgiven for tooting her own trumpet this morning, after the UK economy grew faster than forecast in March.<\/p>\n Following the news that GDP rose by 0.3% in March<\/a>, and by 0.6% in the first quarter of the year<\/a>, Reeves says:<\/p>\n double quotation markToday\u2019s strong growth figures show the Government has the right economic plan.<\/p>\n The choices I have made as Chancellor mean our economy is in a stronger position as we deal with the costs of the war in Iran.<\/p>\n Now is not the time to put our economic stability at risk.<\/p>\n That last sentence sounds like a reproachful glare towards her colleagues who are trying to push prime minister Keir Starmer out of Downing Street (which could lead to a change of chancellor too\u2026)<\/p>\n Share<\/a><\/p>\n Updated at\u00a002.19 EDT<\/p>\n Construction sector surged in March<\/p>\n Output across the UK\u2019s construction output increased by 1.5% in March, the ONS reports, thanks to new building work and repairs.<\/p>\n This morning\u2019s GDP report says:<\/p>\n double quotation markThe increase in monthly output in March 2026 came from increases in both new work, and repair and maintenance, which grew by 2.0% and 0.8%, respectively. At the sector level, the main contributor to the monthly increase was private housing new work, which grew by 2.8%.<\/p>\n That follows a fall in new building work in the second half of last year.<\/p>\n Share<\/a>UK quarterly growth rises to 0.6%<\/p>\n UK economic growth picked up on a quarterly basis, the ONS reports.<\/p>\n UK GDP rose by 0.6% in the January-March quarter, up from 0.2% in October-December.<\/p>\n All three major sectors of the economy grew; services output grew by 0.8%, production output grew by 0.2%; and construction output grew by 0.4%.<\/p>\n Share<\/a>UK economy beats forecasts with growth in March<\/p>\n Newsflash: The UK economy kept growing in March, despite the economic damage caused by the Iran war.<\/p>\n UK GDP rose by 0.3% in March 2026, the Office for National Statistics has reported, beating forecasts of a contraction of 0.2%.<\/p>\n That follows growth of 0.4% in February and no growth in January (revised down from growths of 0.5% and 0.1% previously estimated).<\/p>\n The ONS adds.<\/p>\n double quotation markServices and construction output both grew, by 0.3% and 1.5%, respectively – these growths were partially offset by a 0.2% fall in production.<\/p>\n Share<\/a><\/p>\n Updated at\u00a002.03 EDT<\/p>\n Bank of England deputy governor Sarah Breeden has declared that interest rates do not need to rise in June or July.<\/p>\n In an interview with the Financial Times, published this morning, Breeden said:<\/p>\n double quotation mark\u201cWe\u2019ve got time to understand firstly the size of the shocks and secondly, how the economy is evolving.\u201d<\/p>\n \u201cYou\u2019re obviously correct that we can\u2019t wait forever, but we don\u2019t need to do it in June or July.\u201d<\/p>\n Breeden, a member of the Bank\u2019s monetary policy committee (which sets interest rates) added that the BOE was \u201cin a good place to be able to watch what\u2019s happening in the economy,\u201d saying:<\/p>\n double quotation mark\u201cWe don\u2019t need to rush to act.\u201d<\/p>\n Share<\/a><\/p>\n Updated at\u00a001.56 EDT<\/p>\n Housing market in England and Wales weakening due to Iran war, say estate agents<\/p>\n The Iran war, and the resulting jump in borrowing costs, is dampening the UK housing market.<\/p>\n My colleague Tom Knowles reports:<\/p>\n double quotation markFears of higher mortgage rates and rising inflation as a result of the Middle East conflict are leading to a subdued and downbeat housing market, according to estate agents.<\/p>\n Demand from potential homebuyers across England and Wales has shown a \u201cnoticeable softening\u201d recently, according to a monthly survey of estate agents by the Royal Institution of Chartered Surveyors (RICS).<\/p>\n Members have told the professional body that buyers and sellers are becoming more cautious, and many agents have cited clients who are worried about whether inflation and interest rates will rise in the coming months, leading to slower sales, fewer homes on the market<\/a>, and more price-sensitive buyers.<\/p>\n