UK economy grows 0.6% in Q1 as services sector drives expansion

Britain's economy grew by 0.6% during the January-to-March quarter of 2026, in line with expectations, according to figures released by the Office for National Statistics (ONS).

The latest estimates showed that growth was supported by gains across all major sectors of the economy, with services making the largest contribution.

The ONS estimated that UK real gross domestic product (GDP) increased by an unrevised 0.6% in the first quarter of 2026, following revised growth of 0.1% in the final quarter of 2025.

The services sector leads economic expansion

According to the ONS, economic growth during the first quarter was broad-based, with all three main sectors contributing positively to overall output.

The services sector recorded the strongest performance, expanding by 0.8% during the quarter and providing the largest contribution to GDP growth.

The latest figures indicate a stronger start to 2026 compared with the previous quarter, when economic growth stood at 0.1% after revision.

Annual GDP growth revised

The ONS also updated its annual growth estimates as part of its latest national accounts release.

Real GDP is now estimated to have increased by 1.3% in 2025, slightly lower than the previous estimate of 1.4%.

The agency left its 2024 estimate unchanged, with annual growth at 1.0%.

On a per-person basis, real GDP increased by 0.6% in the first quarter of 2026.

Compared with the same quarter a year earlier, real GDP per head was up 0.7%, according to the ONS.

Household finances weaken

While overall economic output improved, household finances moved in the opposite direction during the quarter.

The ONS reported that real household disposable income per head fell by 0.8% in the January-to-March period.

This followed a 1.2% increase in the final quarter of 2025.

The household saving ratio also declined during the quarter.

According to the statistics agency, the ratio fell by 0.7 percentage points to 8.9%, driven by a reduction in the contribution of non-pension saving.

Revisions incorporated into the latest estimates

The latest release includes revisions covering the period from the first quarter of 2024 through the first quarter of 2026, in line with the ONS National Accounts Revisions Policy.

The agency said the revisions reflect updated source data, including the incorporation of Value Added Tax (VAT) data for the fourth quarter of 2025 for the first time, along with a review of seasonal adjustment.

As a result, there were small upward and downward revisions of 0.1 percentage point to quarterly growth rates across 2025.

The ONS said these changes stemmed from updated source information and seasonal adjustments.

ONS highlights potential for future revisions

The ONS noted that early GDP estimates remain subject to revision as additional information becomes available.

According to the agency, its published analysis shows that the mean absolute revision between the first quarterly GDP estimate and the corresponding estimate three years later averages 0.24 percentage points, either positive or negative.

The agency said revisions are made as more comprehensive data become available through the annual supply and use balancing process, allowing estimates to reflect a broader evidence base.