Commenting on the latest Office of National Statistics GDP data, Barret Kupelian, Chief Economist at PwC, says:
“The UK economy started 2026 stuck in first gear. Monthly GDP was flat in January 2026, and while growth over the three months to January edged up to 0.2%, that is still a subdued pace rather than a convincing acceleration. Production was the main support, up 1.3% on the three-month measure, but services grew by only 0.2% and construction fell by 2.0%, which underlines how patchy the recovery remains.
“The figures also cover only activity up to January, so they do not yet capture any spillovers from the latest Middle East tensions through energy prices, trade or financial markets. In calmer conditions, soft growth and a steady fiscal stance would strengthen the case for rate cuts. But central banks do not ease into a fog of geopolitical uncertainty. The case for lower rates is there domestically, but geopolitics may yet delay the verdict.”
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