UK economy grows 0.3% in March, beating forecasts of contraction

Britain’s economy grew 0.3% in March, a result that surprised economists who had expected a 0.2% contraction and gave ministers a rare economic lift as pressure built over the outlook. The Office for National Statistics said the gain pushed gross domestic product up 0.6% in the first quarter of 2026, after revised growth of 0.2% in the final three months of 2025.

The March reading mattered because it came as the Iran war escalated and fears were rising that higher energy costs and wider uncertainty would hit households and businesses. The stronger-than-expected figure suggested the economy was holding up better than many feared, even if economists warned that seasonal distortions may have flattered the monthly numbers.

The ONS said March followed growth of 0.4% in February and no growth in January, although both of those months were revised down from earlier estimates. The quarterly improvement was broad-based, with all three main sectors contributing, and services providing the biggest lift. Services output rose 0.8% over the three months to March, underscoring how the UK’s largest part of the economy helped offset weaker stretches elsewhere.

For the Labour government, the figures offered short-term political comfort at a time when Rachel Reeves and her colleagues face scrutiny over sluggish living standards and the durability of the recovery. But the underlying message was more cautious than celebratory. The month-to-month rebound was enough to beat the consensus, yet the combination of war-related shocks, energy prices and the risk of a renewed drag on consumer and business confidence still threatened to blunt momentum in the months ahead.

The monthly GDP release was published on 14 May 2026, with the next update scheduled for 12 June 2026. With the final quarter of 2025 now revised to 0.2% growth, the latest figures pointed to an economy that entered spring on firmer footing than expected, but one that still faced a difficult test of whether that resilience could last.