UK economy grew 0.6% in first quarter, ONS confirms

Britain’s economy grew 0.6% in the first three months of 2026, a firmer start to the year than many had expected, but the latest official figures also showed household incomes falling and the recovery leaning heavily on services. For the United States, one of Britain’s closest allies and trading partners, the question is whether this was genuine momentum or a narrow lift from a handful of industries.

The Office for National Statistics said real GDP increased by an unrevised 0.6% in the January-to-March quarter, while output in the final quarter of 2025 was revised down to 0.1% from the earlier reading. Full-year growth for 2025 was also trimmed to 1.3% from 1.4%, leaving the economy larger than in 2024 but still expanding at a modest pace. Services rose 0.8% in the quarter and were the biggest contributor to growth, with computer programming, wholesale and advertising helping offset weaker performances from rental companies and recruitment agencies.

The details underline how uneven the expansion remained. The ONS said all three main sectors added to growth in the quarter, and real GDP per head rose 0.6%, leaving it 0.7% higher than a year earlier. That per-capita gain matters because it strips out population growth and gives a cleaner read on how much room households actually have to spend.

But household finances moved in the opposite direction. Real household disposable income per head fell 0.8% in the first quarter after rising 1.2% at the end of 2025, while the household saving ratio dropped 0.7 percentage points to 8.9% as families drew less support from non-pension saving. That combination suggests many consumers were still under strain even as headline output expanded, a reminder that stronger GDP does not always translate into stronger living standards.

The revision package also showed how much of the story still rests on changing data. The ONS said it had incorporated updated source material, including the first use of VAT data for the fourth quarter of 2025, and continued reviewing seasonal adjustment. It said no statistically significant seasonality issue had been identified, and that the mean absolute revision between the first quarterly GDP estimate and the same quarter three years later is 0.24 percentage points.

Business investment offered one brighter signal. UK Finance said investment rose 0.7% in the quarter after falling by nearly 3% in the previous one, with services, manufacturing and construction all expanding. Even so, the wider policy backdrop remains cautious: the House of Commons Library said the Office for Budget Responsibility was forecasting 1.1% growth for 2026, while HM Treasury’s June survey of independent forecasters averaged 0.9%. With UK GDP at £3,037 billion in 2025, the latest quarter showed an economy still growing, but not yet escaping its weak, stop-start pattern.