The UK economy expanded by 0.6% in Q1 2026, matching market expectations and marking the strongest growth since Q1 2025. This follows an upwardly revised 0.2% increase in the previous quarter. Services output, the main growth driver, rose by 0.8%, up from 0.2% in the prior period. The wholesale and retail trade sector led the gains, growing by 2.0%, with wholesale trade up 3.1% and retail trade up 1.6%. Production output increased by 0.2%, supported by a 0.8% rise in manufacturing and a 0.6% increase in electricity, gas, steam, and air conditioning supply, offsetting declines in mining, quarrying, and water supply sectors. Construction grew by 0.4%, as repair and maintenance surged by 3.4%, while new work fell by 1.9%. On the expenditure side, growth was driven by higher gross capital formation, household consumption, and government spending. Annually, the economy expanded by 1.1% in Q1 2026, exceeding the 0.8% forecast.

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