13 March 2026
If you are covering the latest UK GDP data from the Office for National Statistics, please find below a comment from Lindsay James, investment strategist at Quilter:
“The UK economy has started as it is predicted to go on – sluggish and unexciting, with global risks threatening to derail the government in its quest to boost the rate of growth. The Office for National Statistics reported that January saw no growth whatsoever, with the three-month rate coming in at 0.2%, up marginally from the previous quarterly figure. Services returned to growth in those three months, but quickly stagnated again in January, a potential ongoing concern given the UK’s reliance on that sector. The construction sector also continued its contraction, falling a further 2.0% in the three months to January. The numbers reflect an economy where spending is focussed on needs rather than wants. The fact that car repairs were one of the areas called out for growth, at a time when the UK is blighted by potholes, says a lot. Looking more deeply, consumers are reining in on the ‘fun’ spending – accommodation and recreation are firmly in the red. This suggests confidence remains low, amid rising unemployment, and before events in the Gulf are even taken into account.
“The problem facing the UK is that despite the government saying they need to stick to the plan to produce economic growth, forecasts point to very little improvement, with even 2% growth a year becoming a pipe dream. Now, the economy did manage to confound the expectations that it would slip into recession at the end of 2025, and last year saw it have a good first half of the year so some of that could be repeated in time. But, the OBR just 10 days ago downgraded 2026’s forecast for growth.
“And since the Spring Statement, the geopolitical situation has erupted into something that could further threaten the growth prospects of the UK. Oil is now at $100 a barrel, and with Iran threatening maximum pain on economic issues, that price could easily climb. The longer the oil price stays elevated, the greater the pressures on businesses and consumers. With a weaker labour market hitting at the same time, consumers won’t necessarily be protected by wage rises to the same extent as recent history. Growth, as a result, is going to be increasingly challenged of late with future forecasts very difficult to predict given the closure of the Strait of Hormuz.”
