Deutsche Bank economists say in their World Outlook (WO) report, the United Kingdom (UK) entered the energy shock with stronger Q1\u20112026 data, prompting only a marginal downgrade to growth. Stockpiling is expected to cushion activity as higher energy costs feed into inflation and real incomes. They forecast UK Gross Domestic Product (GDP) growth at 1% in 2026, rising modestly to 1.2% in 2027, with political uncertainty weighing on investment.<\/p>\n
Solid start but inflation and politics weigh<\/p>\n
“A stronger Q1-26 performance means the UK economy entered the energy shock on a firmer footing, hence only a marginal downgrading of the growth forecast since the last WO.”<\/p>\n
“Stockpiling will also support activity as the lagged energy effects feed into inflation (and thus real disposable incomes).”<\/p>\n
“We remain cautious on the outlook<\/a> from summer, as inflation bites into spending.”<\/p>\n “Political uncertainty will also rear its head again, dampening investment and housing activity.”<\/p>\n