Q1 growth shows business resilience

14 May 2026

The UK economy grew by 0.6% in the first three months of the year, according to data from the Office for National Statistics (ONS).

In March, the first full month since the outbreak of the Iran war, the economy grew by 0.3%, despite forecasts of a small contraction.

However, analysts expect growth to weaken in the months ahead as the impact of the Iran conflict continues to filter through to the economy.

The ONS said the boost to the services sector in the first three months of the year was driven in particular by strong performance in wholesale, computer programming and advertising.

Stuart Morrison, Research Manager at the British Chambers of Commerce, said: “Growth of 0.6% in Q1, shows the initial optimism we heard from our members at the start of the year was well grounded. 

“Meanwhile GDP rising by 0.3% in March itself also suggests the continued resilience of business in the face of economic shocks. But firms are concerned the full impact of the Iran conflict will start to show in the coming months. 

“Firms are facing huge cost pressures. Our latest survey shows 73% citing labour costs and 52% citing energy costs as price drivers, even before the escalation in the Middle East. Business confidence remains low and firms are struggling to invest. 

“Recent domestic political uncertainty only adds to business concerns. But the firms we represent are not focused on personalities; they are interested in policies. Yesterday’s King’s Speech provided some positive signals for business, with a pledge to tackle late payments, simply trade and strengthen apprenticeships. 

“But the government must go further. To grow our economy in challenging times, ministers must deliver in partnership with business. That can only come through supporting investment, boosting productivity, and getting more firms exporting.”