UK Q1 2026 GDP up 0.6% as household incomes fall

The UK economy grew by 0.6% in the first quarter of 2026, official data confirmed on Tuesday, June 30, but the expansion was accompanied by a squeeze on household finances and signs of a slowdown as the year progressed.

The Office for National Statistics left its initial estimate for gross domestic product growth between January and March unchanged. The services sector was the primary driver, expanding by 0.8%, while production and construction each grew by 0.2%. Real GDP per head also increased by 0.6% in the quarter.

However, the figures revealed a decline in living standards, with real household disposable income per head falling by 0.8% in the first quarter. Officials attributed the drop to rising prices and higher capital gains tax receipts. The household saving ratio also decreased by 0.7 percentage points to 8.9%, driven by reduced non-pension savings.

The data also included downward revisions to previous estimates. Growth in the final quarter of 2025 was revised to 0.1% from 0.2%, meaning the economy expanded by 1.3% for the whole of 2025, slightly lower than the earlier 1.4% estimate.

The robust first-quarter performance appears to have been short-lived. The ONS reported...