UK economy grows 0.3% in March despite Iran war impact, ONS figures show

Added: 2026-05-16

[00:00:00]Welcome back. Let's get you more details on that encouraging GDP data that we've got at the top of the hour. Paul's here and got all the numbers for us. Paul, >> yeah, your early morning charts, uh, Wolf, which, um, no day should begin without positive growth figures, some positive news for the government. Get that. Um, these are the figures for March. This shows monthly figures going back to the start of 2025. This is the number we're looking at. 0.3% announced today. Economist expectations, market expectations of a contraction, the economy shrinking, being in negative territory because March is the first month of the war. Uh the USIsraeli attacks on Iran with all the consequent effects on energy prices in particular.

[00:00:40]Felt like it had to be negative for the economy, but it's shown some positive growth. some to get into the weeds a tiny bit. There's been a little bit of a revision as they call it of the February number. That's come down as has the January number when growth was flat. So, but it does balance out to a to a positive uh picture. One that frankly is totally unexpected uh and one that uh you've already heard the minister this morning welcoming. We can look at how that affects the quarterly number. This is the figures for March, first three months of the year, the quarters of the economic signposts uh for the year and again positive territory that was expected 0.6%.

[00:01:16]Uh but it is the enduring strength relative strength let's call it that of the economy in March that really sticks out and there's some some notes in here from the ONS that are striking. They do uh business and workforce surveys. They talk to employers. talked to companies uh about how they're feeling about their business and they've had uh companies telling they are more positive uh about revenue and about their growth in March than they expected turnover growing and potential redundancies as they call them in decline. So they might have been expecting to be laying people off because look the economy has been slowing down uh in at the end of last year. Um but there's some strength there and we we of course have to see this is month one of the war. We know the inflationary impacts are starting to be felt. Much of the economic impact is still in the post if you like. But this is some positive news.

[00:02:06]>> Definitely much better than expected for March. Obviously, partly because of the political impacts. We've been looking at borrowing costs. Bond markets aren't open yet, but everyone will be watching that at the open in half an hour's time.

[00:02:15]>> Yeah, indeed. All all of these numbers are looking back at how the economyy's performed. We can bring one more chart.

[00:02:19]This is the 10year uh guilt. This is uh essentially the price. This is the indicative interest rate that the government plays to borrow money. We've talked about it a lot, haven't we? With uh political instability being something the markets do not like. And it's worth looking at, I think, this is one just reminding us where we are because we not only have the likelihood of a leadership challenge, but Angela Rainer entering the frey. Of course, Rainer on the left of the party, some of her policies perhaps more inclination to spend. Would that indicate markets would be nervous about that given how much debt the UK already has and you can see how we have marched up. Now, some of this is the war, some of this is energy prices, but in the last week, we have got to an 18-year high two days ago. uh when the instability around the prime minister started to feel like it was terminal for secure star it did dip off a little bit some of that was yesterday when when streeting uh was preparing to resign something we're still waiting for so the markets while there are lots of factors in here and they don't move as a herd there are lots of people making decisions there is a distaste for political instability that the UK pays for in its borrowing costs it means the government is spending more of our revenue our taxpayer revenue on on meeting those bills so it Very interested to see when the markets open what happens to this line uh and when the contenders if there is a leadership uh election when they become clearer.