GDP grew by 0.6% in the three months to March with construction sector finally growing again

This looks on the face of it mildly positive performance for Q1, but this will be temporary success once the real effect of the Middle East conflict bites into our economy. Annual GDP targets have already been scaled back, the ripple of higher energy prices, tax rises and increases in borrowing costs will plunge the UK in reverse for the remainder of 2026.

Although our PM will revel in this data, we need to factor in that this was B.I (before Iran) and this highlights the trajectory we could be on had it not been for Trump’s conflict in the Middle East. Although it may seem calm at present we must remember it was also calm on the Titanic before it hit the iceberg.

UK GDP growth will be positively received and will drive more confidence into markets, including property.

Services and construction were strong however the full impact of increased borrowing costs and global uncertainty were not entirely felt in this data meaning the next data release is unlikely to be as positive.

In real time, the market continues to hold strong and those who are holding off a move, are deciding to improve their current property which benefits the economy enormously

Q1 GDP growth of 0.6% is welcome, but one swallow doesn't make a summer. January and February did the heavy lifting, and March was already showing production falling, the first month feeling the full weight of Middle East conflict and energy price rises. The IMF made its sharpest downward revision for any G7 economy right here in the UK, and independent forecasters have slashed their full-year outlook to just 0.6%. At best, future quarters look flat. Construction growing after five consecutive falls is a relief, but one positive quarter doesn't make a recovery. The housing sector needs sustained growth to make any dent in supply, and we're nowhere near that. Don't be fooled by the headline number.

Keir Starmer will no doubt be reaching for the champagne after today's GDP figures showed the UK economy growing by a whopping 0.6%. Proof, if ever it were needed, that the government's economic strategy is firing on all cylinders, assuming those cylinders are very small and moving quite slowly.

Whilst positive, these figures feel like a kick in the teeth. A sign of what could have been if it didn’t kick off in Iran. The next quarters figures will be the telling ones and I’m guessing they’ll paint a different picture.
Between now and then, the government need to stop the infighting and start implementing ways to help the ever stretched British public.

The figures are better than many expected and challenge the narrative that the UK economy is simply stagnating. Growth may not be spectacular, but it is proving more resilient than feared. Services continue to do the heavy lifting, while construction returning to growth after five consecutive declines matters psychologically as much as economically. Construction is often a barometer of confidence. When developers stop building and businesses stop investing, it usually signals caution about the future. A return to growth suggests parts of the economy may be finding a floor.

That said, one quarter does not make a trend. The UK still faces weak productivity, fragile consumer confidence and persistent fiscal pressure. After a prolonged period where almost every data release felt negative, these figures are perhaps best viewed not as evidence of a decisive turning point, but as a reminder that economies are rarely quite as strong or as weak as the prevailing narrative suggests.

Finally, some good news for construction, but nobody should get carried away with this. After months of decline, it’s encouraging to see the sector growing again. A stronger construction industry usually means more jobs and more investment, which the economy badly needs right now. But households still don’t feel better off, so while the figures are positive, people will judge the economy on whether their own finances actually improve. Until families genuinely start feeling better off, many of these positive economic headlines feel completely disconnected from reality.