Good news for the UK
Key Points
- The UK economy grew by 0.6% in the first quarter of 2026, unrevised from the first estimate, according to ONS figures published on 30 June 2026.
- Growth was led by the services sector, which expanded by 0.8%, with production and construction each contributing 0.2%.
- The figure follows a revised 0.1% expansion in the final quarter of 2025 and confirms annual growth of 1.3% across 2025.
- Investment manager Jonathan Raymond of Quilter Cheviot warned the quarter was "already in the rear-view mirror", citing a 0.1% contraction in monthly output in April.
- Analysts caution the first quarter may prove a peak for growth rather than the start of a sustained recovery, amid energy-market and political uncertainty.
The UK economy expanded by 0.6% in the first quarter of 2026, the Office for National Statistics confirmed on Monday (29 July), leaving its first estimate unrevised and pointing to a degree of momentum at the start of the year.
Growth was led by the services sector, which grew by 0.8% over the quarter, with both production and construction contributing increases of 0.2% .
The figure follows a revised 0.1% expansion in the final quarter of 2025, and confirms annual growth of 1.3% across last year, revised down marginally from an earlier estimate of 1.4%.
Uncertainty still looms
Yet the headline number arrives against a more uncertain backdrop.
Jonathan Raymond, Investment Manager at Quilter Cheviot, said the quarter was “already in the rear-view mirror”, pointing to a 0.1% contraction in monthly output in April as evidence that activity had begun to soften as the second quarter opened.
“That shift highlights how quickly conditions have changed and raises the prospect that the first quarter may prove to be a peak for growth rather than the start of a sustained recovery,” Raymond said.
He added that the broader outlook remained clouded by fragile energy markets, with a ceasefire between the United States and Iran easing immediate pressure but leaving the risk of renewed volatility in place.
A period of heightened political uncertainty, he said, had compounded the picture, with markets scrutinising the fiscal implications of a potential Andy Burnham-led government.
The combination, Raymond argued, leaves the Bank of England in a difficult position – weighing early signs of slowing growth against inflation risks that remain sensitive to energy prices and policy direction.
