UK Economy Surprises with Strongest Quarterly Growth in a Year Amid Iran War
By Aboki Forex —
The UK economy posted its strongest quarterly growth in a year during the first three months of 2026, driven by a surprise surge in activity after the outbreak of the Iran war, official data shows.
Gross Domestic Product (GDP) rose by 0.6% between January and March, the Office for National Statistics (ONS) reported. That beat the 0.5% forecast from most economists and matched the revised 0.6% growth recorded in the first quarter of 2025.
The ONS also said GDP grew by 0.3% in March, defying expectations of a slowdown due to the Middle East conflict.
Chancellor Warns Against Economic Instability
Chancellor Rachel Reeves responded to the figures with a warning against threatening the “stability” of the economy, as uncertainty grows over Prime Minister Sir Keir Starmer’s leadership.
“The choices I have made as Chancellor mean our economy is in a stronger position as we deal with the costs of the war in Iran,” Reeves said in a statement. “Now is not the time to put our economic stability at risk. To do so would leave families and business worse off. Instead, this Government is getting on with the job of building an economy that is stronger, more resilient and prepared for the future.”
Services, Manufacturing, and Construction Drive Growth
The services industry led the quarterly expansion, while manufacturing and construction output also increased, according to the ONS.
The statistics agency revised previous data as well. February’s growth was cut to 0.4% from 0.5%, and January’s was revised to show no growth from a previous 0.1% increase. GDP for the final quarter of 2025 was revised up to 0.2% from 0.1%.