STORY
The UK economy grew unexpectedly in March, delivering a boost for Rachel Reeves as the Chancellor argued that the Government’s economic plan was beginning to work. Official figures showed GDP rose by 0.3% in March, defying forecasts of a 0.2% contraction. The stronger-than-expected monthly figure helped the economy grow by 0.6% across the first quarter of 2026, up from 0.2% in the final quarter of 2025.
The growth was driven largely by the services sector, with computer programming and advertising among the areas performing strongly. Construction also grew in March, while production fell slightly. Across the quarter, services output rose by 0.8%, construction by 0.4% and production by 0.2%.
The figures are politically important for Reeves, who said they showed ministers had the “right economic plan” and warned against putting economic stability at risk during Labour’s leadership turmoil. She argued that a leadership contest could create further uncertainty at a time when the economy was showing signs of recovery.