UK Growth Scepticism

ING argues that the UK's 0.6% Q1 GDP growth is misleading due to seasonal adjustment errors, with underlying growth likely closer to 0.2%. The outlook remains cautious as inflation is expected to spike above 4% this summer, potentially leading to a negative third quarter.

Key Takeaways

• 1.The reported 0.6% UK GDP growth in Q1 2026 is likely overstated due to flawed seasonal adjustment methods by the ONS.
• 2.Underlying economic growth is likely much lower, between 0.2-0.3%, once seasonal anomalies are stripped away.
• 3.The UK economic outlook is deteriorating for the summer, with inflation expected to exceed 4% and real incomes set to fall.

Table of Contents

• UK GDP has become very seasonal
• Construction bounced in Q1 but it's unlikely to last

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