UK economy: Six charts that show what we now know and the risks

Official data for the first quarter show the UK economy was more resilient than many expected: GDP rose by 0.6% in Q1 and the first estimate for March showed a 0.3% monthly increase. Those figures suggest activity did not collapse immediately after geopolitical tensions in the Middle East intensified.

Breaking down the numbers, the services sector provided the main boost, while construction and production also contributed positively. Retail and wholesale trade, along with professional, scientific and information activities, were notable contributors; conversely, machinery and certain administrative services showed weakness, pointing to an uneven sectoral picture and signs of short-term stockpiling in some industries.

On a quarterly basis the UK’s performance places it among the stronger G7 economies for this period, a point that has attracted attention in policy and market circles. Such cross-country comparisons should, however, be treated cautiously because timings, revisions and seasonal effects can alter the ranking once all countries have released fully consistent data. Policymakers will therefore weigh the better-than-expected start to the year against known downside risks.

In a wider context, the upbeat Q1 outturn arrived as the Iran conflict was beginning to feed through to global energy markets, creating potential headwinds for growth. Consumer confidence surveys and shorter-term indicators point to weakening household sentiment as fuel and borrowing costs bite, suggesting that early-year momentum could slow if the external shock persists.

Analysts say the data justify cautious optimism but warn that the bulk of the risks lie ahead: energy price moves, trade disruptions and household spending will be key variables to watch. Monetary and fiscal policy signals, together with business investment trends, will determine whether the resilience seen in early 2026 is sustained or gives way to slower growth later in the year.