Three-month GDP growth continues to accelerate, reaching 0.7% in the rolling quarter to April 2026. But the month itself contracts 0.1% — the first monthly fall in eight months — as services stumble and geopolitical costs begin to bite.
Key Points
| Indicator | Mar 2026 | Apr 2026 | 3m to Apr | Year-on-year |
|---|---|---|---|---|
| GDP (monthly %) | +0.3% | −0.1% | +0.7% | +1.1% |
| Services output | +0.3% | −0.2% | +0.8% | +1.6% |
| Production output | −0.2% | 0.0% | −0.1% | −0.2% |
| Manufacturing output | +1.2% | +0.4% | +0.6% | — |
| Construction output | +1.5% | +0.1% | +1.6% | −1.0% |
| Consumer-facing services | +0.5% | −0.5% | +0.6% | — |
The three-month number is what the press office will lead with. Five consecutive rolling expansions, an accelerating trend — the Chancellor will read that as vindication. She should read the monthly print instead.
GDP fell 0.1% in April. March was +0.3%. The direction has reversed. Services fell 0.2%, dragged by a 9.1% collapse in sports and recreation, a 2.2% fall in admin services, and a 1.3% drop in retail. The ONS attributes part of the recreation fall to cancelled Middle East events — plausible, but the admin and retail weakness is a domestic story.
The more uncomfortable signal is cost pressure. 40% of trading businesses reported higher input prices in April — the highest since December 2022, up 11 percentage points on February. That is a supply-side shock transmitting through margins now. And the May outlook — HR1 redundancy notifications rising sharply, retail footfall below May 2025, ports on a downward trend — points the same direction.
A geopolitical supply shock feeding into energy costs is precisely the transmission that flatters aggregate output while compressing margins, investment intentions, and hiring decisions beneath the surface. The three-month number looks fine. The monthly number and the May lead data do not.
For the Bank of England, this is the stagflationary bind the MPC finds hardest to navigate. Rising input costs argue against cuts. Softening demand and rising redundancy notices argue for easing. If May confirms a second consecutive monthly contraction, the Bank's path becomes materially more difficult.
The UK grew solidly through Q1 2026 — that much is clear. But the structural drivers remain narrow: services and, tentatively, construction. Production is contributing nothing. Manufacturing, while positive, is too small to offset broader services weakness at scale.
The energy cost signal is the more consequential story. If input costs stay elevated — which the geopolitical situation suggests is likely — real household incomes get squeezed again, consumer-facing services face renewed pressure, and the second half of 2026 growth projections are vulnerable. The rolling three-month numbers will keep looking acceptable for another month or two. The underlying economy is already moving in a different direction.
Note: Revisions to Q1 (Jan–Mar) 2024 and subsequent periods will be incorporated in the Quarterly National Accounts publication on 30 June 2026 and the next monthly GDP bulletin on 16 July 2026.