London Daily

Focus on the big picture.
Tuesday, Sep 08, 2026

UK economy shrank 0.3% in March, ONS figures show

UK economy shrank 0.3% in March, ONS figures show

Low car and retail sales in March, along with strikes, brought economic output down.
The UK economy grew slightly in the first three months of the year, according to official figures - but contracted in March.

Growth of 0.1% was recorded by the Office of National Statistics (ONS) in the three months up to March, the lowest amount possible to still be classed as growth as IT and construction sector activity offset the impact of strikes.

However, the economy shrank 0.3% in March as retail and car sales fell sharply, and public sector strikes were more disruptive than February as NHS staff and teachers took to picket lines.

Contraction also came thanks to a 0.5% fall in services production. Distribution and retail also had a poor month as cost of living pressures hit consumers.

Economic research firm Pantheon Macro has pointed out the UK is falling below the G7 group of the world's largest economies.

"The UK remains the only G7 country in which the main quarterly measure of GDP has not recovered to its pre-COVID peak yet; it still was 0.5% below its Q4 2019 level in Q1," the Pantheon Macro chief economist said.

"This chiefly reflects weakness in households' real spending, which was 2.3% below its Q4 2019 level. But at least the magnitude of the underperformance is not increasing relative to other countries in Europe, which have faced a similarly enormous energy price shock," Samuel Tombs said.

ONS publishes GDP data every month, which stands for gross domestic product and measures the sum total of everything produced in the economy.

Higher economic growth brings increased tax revenues and likely higher incomes and standards of living.

As part of his focus on economic growth, Prime Minister Rishi Sunak says growing the economy will create better-paid jobs and opportunities across the country.

A three-month period, or quarter, of economic growth means the UK is on the path to avoid recession. But the growth recorded is small.

An economy is technically in a recession after two quarters of negative economic growth, though the Bank of England now expects the UK will avoid recession this year.

Today's announcement followed a flatlining economy in February and growth of 0.5% in January.

In response to the figures, Chancellor Jeremy Hunt said: "It's good news that the economy is growing but to reach the government's growth priority we need to stay focused on competitive taxes, labour supply and productivity.

"The Bank of England governor confirmed yesterday that the budget has made an important start but we will keep going until the job is done and we have the high wage, high growth economy we need."

Rachel Reeves MP, Labour's shadow chancellor of the Exchequer, responding to the latest GDP forecast today, said: "Labour wants to match the ambition of the British people - while the Tories would rather continue down a path of managed decline of low growth and high taxes.

"Despite our country's huge potential and promise, today is another day in the dismal low growth record book of this Conservative government.

"The facts remain that families are feeling worse off and we're lagging behind on the global stage.

"Labour's mission to secure the highest sustained growth in the G7 will make families across every part of our country better off."
Newsletter

Related Articles

0:00
0:00
Close
British Chambers of Commerce Forecasts UK Growth of 1% as Investment Remains Weak
UK Suspends Local Government Reorganisation Decisions and Cancels Planned Shadow Authority Polls
UK Parliament Opens Inquiry Into Gaps in Climate Change Preparedness
Andy Burnham and Xi Jinping Hold Talks on Trade, Security and British Consular Cases
UK Joins France, Canada and Other Nations in Measures Against Israeli West Bank Settlements
UK Announces New Sanctions Targeting Iranian Nuclear and Military Networks
British Chambers of Commerce Calls for Business Rate Reform and Productivity Support
UK Farmers Warn Dry Summer Could Reduce Crop Yields and Push Up Food Prices
UK Rail Networks Hit by Widespread Delays After Major Signalling Failures
Matt Clifford Resigns as ARIA Chair After Conflict-of-Interest Scrutiny
UK and France Say Joint Border Operations Have Prevented More Than 48,000 Irregular Channel Crossings
UK Core Inflation Remains Above Expectations as Utility and Commodity Costs Stay Elevated
Jaguar Land Rover Considers Up to 4,000 UK Job Cuts Amid Automotive Industry Pressure
UK Government Pauses Local Authority Reorganisation for Legal Review
UK Public Borrowing Reaches £1.8 Billion in July, Adding Pressure Before Autumn Budget
Chancellor John Healey Puts Regional Devolution and Fiscal Discipline at Heart of UK Growth Plan
Counter-Terrorism Police Lead Salford Investigation After Two Teenagers Charged
UK Rejects Financial Reparations for Transatlantic Slavery
UK and Egypt Step Up Diplomacy Over Escalating West Bank Tensions
UK Pauses Council Reorganisation Across Four English Counties
Jaguar Land Rover Plans 4,000 Job Cuts in Major UK Restructuring
UK Unveils Planning and Regulatory Overhaul to Speed Infrastructure and Economic Growth
University of Bristol Opens £500 Million Innovation Campus
Families Give Evidence to Independent Review of Sussex Maternity Failures
Sweden Confirms Deportation of 458 British Citizens Over Post-Brexit Residency Rules
UK Launches £3 Million Challenge for Long-Duration Energy Storage
Reform UK Proposes £100 Billion in Spending Cuts and Brownfield Deregulation
Andy Burnham Warns Macron That EU Procurement Rules Could Hurt British Steel
Andy Burnham Faces Major Decision on Future North Sea Oil and Gas Drilling
SEND Support in England Projected to Reach One in 10 Pupils
England’s Housing Courts Struggle With Surge in No-Fault Eviction Cases
Violent Clashes Erupt in Portsmouth During Protest Against Asylum Processing
Three-Quarters of NHS Emergency Staff Report Regular Violence or Aggression
UK Considers Converting Female Prison Space for Male Inmates as Overcrowding Worsens
UK House Prices Record First Annual Decline in Nearly Three Years
UK Government Reassesses Policy Toward Israel Amid Calls for Diplomatic Shift
Reform UK Faces Police Scrutiny Over Alleged Foreign Donations Scheme
University of Bristol Opens £500 Million Temple Quarter Enterprise Campus
Online Bookmakers Accused of Privacy Breaches Through Cookie Consent Practices
Health Campaigners Urge UK Government to Abandon U.S. Pharmaceutical Agreement
Three-Quarters of UK A&E Staff Report Regular Violence or Aggression
Far-Right Demonstrations Target Portsmouth as Small-Boat Crossings Fuel Tensions
UK Records Hottest Summer on Record After Severe Heatwaves
UK Travellers Face Renewed EU Border Delays as Temporary Flexibility Ends
UK Rejects Calls to Pause AI Data Centre Expansion Despite Energy Concerns
UK Defence Figures Push for 3% Spending Target Amid Falklands Concerns
England Faces Rising Financial Pressure as Special Educational Needs Plans Surge
Metropolitan Police Consider Reform UK Probe Over Overseas Donations
Keir Starmer to Leave Parliament, Triggering By-Election
UK Treasury Weighs Windfall Taxes on Banks and Oil Companies Amid Bond Market Turmoil
×