Gross domestic product (GDP) increased by 0.6% in the three months to March, in line with expectations, the Office for National Statistics (ONS) has revealed.

The latest data, which compared the three months to March to the three months to December, comes after the start of the Middle East conflict at the beginning of March.

This increase follows growth of 0.4% and 0.5% in the three months to January and February respectively.

The ONS said the growth was supported by a 0.8% increase in services output, while production and construction output grew by 0.2% and 0.4% respectively.

Month-on-month, the ONS found that GDP increased by 0.3%, following growth of 0.4% in February and no growth in January.

In this period, services and construction output both grew by 0.3% and 1.5% respectively, and was offset by a 0.2% drop in production output.

Investment strategist at Quilter, Lindsay James, stated that the latest data is proving more resilient than many had feared.

She added: "However, expectations have shifted significantly since the outbreak of war and this resilience may start to be seriously tested. The IMF has cut its UK growth forecast from 1.3% to 0.8%, and the longer the Strait of Hormuz remains closed, the greater the risk that further downgrades to global growth follow. With global growth already revised down from 3.3% to 3.1%, the UK is unlikely to be sheltered from the fallout, particularly as an energy importer.

"For investors, the concern is that a fragile domestic recovery is now meeting a much less forgiving global backdrop, at the same time as political risk is again being priced into UK assets.”

Associate director, investment specialist at Evelyn Partners, David Goebel, concluded: "In recent years, early-year growth has tended to be front-loaded and followed by a slowdown, and there is a concern this year could follow in that pattern. With energy costs rising from the Iran conflict, which has kept Brent crude well above $100 a barrel, the impact in subsequent quarters will be marked. Full-year 2026 growth is currently estimated at just 0.8%, and could be much lower in the event of continued oil price escalation.

"The headline number offers a brief political reprieve for Chancellor Rachel Reeves amid the intensifying leadership crisis engulfing the government. With business investment still contracting on an annual basis and the Iran war casting a long shadow over the outlook, the government's growth agenda remains unproven."

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