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UK economy beats forecasts with 0.3% growth in March despite Iran war – business live | Business
UK economy beats forecasts with growth in March
Newsflash: The UK economy kept growing in March, despite the economic damage caused by the Iran war.
UK GDP rose by 0.3% in March 2026, the Office for National Statistics has reported, beating forecasts of a contraction of 0.2%.
That follows growth of 0.4% in February and no growth in January (revised down from growths of 0.5% and 0.1% previously estimated).
The ONS adds.
Services and construction output both grew, by 0.3% and 1.5%, respectively – these growths were partially offset by a 0.2% fall in production.
Key events
Construction sector surged in March
Output across the UK’s construction output increased by 1.5% in March, the ONS reports, thanks to new building work and repairs.
This morning’s GDP report says:
The increase in monthly output in March 2026 came from increases in both new work, and repair and maintenance, which grew by 2.0% and 0.8%, respectively. At the sector level, the main contributor to the monthly increase was private housing new work, which grew by 2.8%.
That follows a fall in new building work in the second half of last year.
UK quarterly growth rises to 0.6%
UK economic growth picked up on a quarterly basis, the ONS reports.
UK GDP rose by 0.6% in the January-March quarter, up from 0.2% in October-December.
All three major sectors of the economy grew; services output grew by 0.8%, production output grew by 0.2%; and construction output grew by 0.4%.
UK economy beats forecasts with growth in March
Newsflash: The UK economy kept growing in March, despite the economic damage caused by the Iran war.
UK GDP rose by 0.3% in March 2026, the Office for National Statistics has reported, beating forecasts of a contraction of 0.2%.
That follows growth of 0.4% in February and no growth in January (revised down from growths of 0.5% and 0.1% previously estimated).
The ONS adds.
Services and construction output both grew, by 0.3% and 1.5%, respectively – these growths were partially offset by a 0.2% fall in production.
Bank of England deputy governor Sarah Breeden has declared that interest rates do not need to rise in June or July.
In an interview with the Financial Times, published this morning, Breeden said:
“We’ve got time to understand firstly the size of the shocks and secondly, how the economy is evolving.”
“You’re obviously correct that we can’t wait forever, but we don’t need to do it in June or July.”
Breeden, a member of the Bank’s monetary policy committee (which sets interest rates) added that the BOE was “in a good place to be able to watch what’s happening in the economy,” saying:
“We don’t need to rush to act.”
Housing market in England and Wales weakening due to Iran war, say estate agents
The Iran war, and the resulting jump in borrowing costs, is dampening the UK housing market.
My colleague Tom Knowles reports:
Fears of higher mortgage rates and rising inflation as a result of the Middle East conflict are leading to a subdued and downbeat housing market, according to estate agents.
Demand from potential homebuyers across England and Wales has shown a “noticeable softening” recently, according to a monthly survey of estate agents by the Royal Institution of Chartered Surveyors (RICS).
Members have told the professional body that buyers and sellers are becoming more cautious, and many agents have cited clients who are worried about whether inflation and interest rates will rise in the coming months, leading to slower sales, fewer homes on the market, and more price-sensitive buyers.
Introduction: It’s UK GDP day
Good morning. We’re about to learn how much economic damage the UK suffered in the early weeks of the Iran war.
The first estimate of UK gross domestic product (GDP) in March, and for the first quarter of the year, is due to be released at 7am.
Economics fear the Middle East conflict, which began at the end of February, will have hit activity in the UK. The consensus is that GDP may have fallen by around 0.2% in March, a reversal of the 0.5% growth recorded in February.
For Q1 as a whole, City experts predict growth of 0.6%, up from 0.1% in October-December 2025.
But the outlook for 2026 looks tough, as economies are hit by rising energy prices, with food inflation set to jump too.
Fergus Jimenez-England, associate economist at the economic forecasting body NIESR, fears the UK economy faces “a year of weak growth and high inflation.”
“The UK economy is in a state of transition. It began the year with some momentum, as business sentiment recovered following the Autumn Budget, but conflict in the Middle East has since stifled that momentum.
As businesses adjust to this latest energy shock, leading indicators are sending mixed signals. Input price inflation has picked up sharply and job vacancies continue to fall, pointing to softer demand conditions ahead. At the same time, retail sales and PMIs have held up, although some of this strength may reflect firms and households bringing forward spending in anticipation of further price rises.”
The agenda
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7am BST: UK GDP report for Q1 2026
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7am BST: UK trade report for Q1 2026
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9.30am BST: Survey of economic activity and social change in the UK
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10.30am BST: Resolution Foundation event: Resetting Government economic priorities for the remainder of the Parliament
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1.30pm US retail sales for April
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1.30pm US initial jobless claims
The family of Shaun Burton, say they are “devastated” by the loss.
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Key events
In the opening half an hour against Cape Verde, Mikel Oyarzabal, the centre-forward, did not get a single touch.
Kyle Green gets in touch: “Your highlighting of Lalas and his absurdity is something that has prevented me from wanting to watch the coverage on Fox. While every channel has its pros and cons I just can’t.
“I’m 45 and probably the youngest of anyone who remembers him as a player instead of an opinionated insert insult here. As for the match this could be more competitive than it looks on paper Spain need a win the pressure is on them. Saudi Arabia could hold out for a draw and see what happens in their last match. “
News from the England camp, and it seems to be good news on Declan Rice.
“I’m ready and fit, raring to go. I was feeling a little bit of neural pain in my hamstring, which I was managing from after Christmas with Arsenal for a very long time. Obviously, not a lot of people would have known that. It was all behind-the-scenes stuff but it was a smart decision.
“In the end, that last 20 minutes is probably where you pick up the most, and it’s where you play a 70-minute match. But that last 20 is where you really feel your body going for it. And I think it was a smart decision because the last few days I felt really, really good.”
Alex Reid has penned today’s weekend special Football Daily.
Portugal v Uzbekistan on Tuesday enticingly pits the incredibly nice, incredibly 41-year-old-superstar-tolerant Roberto Martínez against Fabio Cannavaro, who’s won a Ballon d’Or as a player and the Chinese Super League as a coach. While the fixture following that game really does see the dream of Thomas Tuchel – in his first international job with England – taking on Queiroz, who is in charge of his ninth national side with Ghana.
The expected formations are 4-2-3-1 for Spain, and 5-3-2 for the Saudi Arabians.
The Saudi team features two Donis changes: Ali Lajami, a defender, and Nasser Al Dawsari, a midfielder, are preferred to Mohammed Abu Al Shamat and Mohamed Kanno. You may recall Salem Al Dawsari, the Saudi captain, as the man who scored the winner against Argentina.
An entertaining read, even for those of us who have just seen the clips.
In a conversation where his co-panelist is casually reminiscing about his days playing alongside Messi or exchanging shirts with Ronaldo Nazário at the World Cup, what exactly is Lalas going to talk about – coming on as a second-half substitute for Earnie Stewart in a friendly against Scotland in 1998? Helping the Kansas City Wizards finish last in the 1999 MLS Western Conference? Did Lalas enjoy an elite playing career? No. But does he do the background reading that could compensate for his relative lack of standing in a conversation with titans like Henry and Zlatan? Also no. But is he charming or funny or charismatic or otherwise magnetic on screen? Eh, no.
For the record, I once interviewed Alexi Lalas on the challenge of playing against Romario in the 1994 World Cup. He had this to say:
“He could kill you in so many different ways. If you remember from that World Cup, he scored so many types of goals. That ranged from solo adventures to an outside-of-the-right-foot half-volley off a corner kick. Romario was both the most difficult to play against and the best that I have faced.
“Roberto Baggio was doing his thing, but in terms of consistency and living up to the hype, he [Romario] was the best. As with all stars, there was a moment when the fans sit up in their seats, and that was a feeling I got with Romario. When it got close to him and the potential for his involvement in a play was there, everybody sat up in their seat. They knew that something spectacular would be happening.”
Saturday’s match reports here.
The Saudi Arabia coach, and Blackburn legend, Georgios Donis, spoke about the challenges facing his team: “Spain is not the same team when Yamal or Williams are on the bench.
“While they still have plenty of possession, they lack the individual one-on-one penetration when these two are missing. I’m not saying it’s a problem for Spain, but when those players are missing, they play in a different way. We saw this very clearly against Cape Verde.
“We are playing against one of the best teams in the world, and it’s very important that when you play against these kinds of teams, you should enjoy the experience and respect the opponent, but not too much.
“It is very hard for any team playing against Spain to have any time in possession. So what we must do is to be more in control of our movement and compact, and when the ball goes through the lines, be able to defend dynamically.
“It’s nice to see miracles in football, and we’ve seen favourites losing against underdogs. Of course, it’s great for Saudi football to have a great memory of the result against Argentina, but we aren’t drawing anything from that.
“I think we’ll feel more pressure in that [Cape Verde] game than we will against Spain.”
The Spain coach, Luis De La Fuente had this to say in his Saturday press conference: “This generation of footballers is highly competitive and really fired up… It’s going to be a completely different story,” he said at his pre-match press conference on Saturday. There is no drama or crisis. The bottom line is simply that we need to win tomorrow.”
Four changes for Spain: Lamine Yamal, Pedro Porro, Dani Olmo and Alex Baena also come into the side with Marcos Llorente, Fabian Ruiz, Ferran Torres and Gavi dropping out.
The teams – Lamine Yamal starts
Spain: Simon, Porro, Cubarsi, Laporte, Cucurella, Gonzalez, Rodri, Yamal, Olmo, Baena, Oyarzabal. Subs: Raya, Joan Garcia, Pubill, Grimaldo, Eric Garcia, Llorente, Merino, Torres, Fabian, Gavi, Pino, Williams, Zubimendi, Munoz, Iglesias.
Saudi Arabia: Al Owais, Abdulhamid, Tambakti, Lajami, Al Amri, Al Harbi, Nasser Al Dawsari, Al Khaibari, Al Juwayr, Al Buraikan, Salem Al Dawsari. Subs: Al Aqidi, Al Kassar, Majrashi, Yahya, Al Shehri, Al Boushal, Kadesh, Al Johani, Al Ghannam, Al Hajji, Al Hamdan, Mandash, Kanno, Thakri, Abu Al Shamat.
Referee: Raphael Claus (Brazil)
Perhaps one of the Saudi -players can write themselves into this high-grade selection?
Perhaps it can be their goalkeeper.
Madrid screening of Spain v Saudi Arabia cancelled due to heat
The public screening of Spain’s World Cup match against Saudi Arabia in Madrid on Sunday has been cancelled because of extreme heat forecast for the Spanish capital, officials said.
The match, due to kick off at 6pm local time on Sunday, had been scheduled to be shown on a giant screen installed by the Spanish football federation (RFEF) at a fan zone in Plaza de Colón in central Madrid.
Madrid city council and the federation decided to cancel the screening after national weather agency AEMET issued an orange heat warning – the second-highest level – for the Madrid region, with temperatures forecast to reach 40C.
“The decision has been taken with the aim of protecting the health of attendees, event staff and support services involved in the event,” Madrid city hall said in a statement, apologising for any inconvenience.
Officials urged supporters to watch the match indoors in air-conditioned spaces and avoid prolonged exposure to the heat.
Large parts of Spain are experiencing unusually high temperatures for June as a mass of hot air from North Africa moves across the Iberian Peninsula.
A total of 13 of Spain’s 17 regions are on orange alert for heat on Sunday, while the northern Basque Country bordering France is on red alert, the highest level.
Authorities advised residents and visitors to take precautions during the heatwave, including drinking water regularly, staying in cool environments, limiting outdoor physical activity during the hottest hours of the day and taking extra care of vulnerable people. AFP
Can Saudi Arabia repeat the magic of 2022?
Argentina arrived in Qatar on a 36-game unbeaten run. When Lionel Messi opened the scoring from the penalty spot after 10 minutes, a comfortable afternoon seemed in the offing. Saleh al-Shehri and Salem al-Dawsari had other ideas, Argentina had three goals disallowed for offside in the space of 13 minutes and the greatest comeback in Saudi Arabia football history was made. Argentina went on to lift the trophy, while defeats to Poland and Mexico meant the Saudis did not reach the knock-out stage.
Unai Simon over David Raya is a controversial choice for De la Fuentes. The Arsenal keeper could lay claim to being Europe’s best this season.
“Those at the Champions League final had a few more days, so I got there on the Wednesday night,” Raya says. “I arrived a bit before Fabián [Ruiz]. I was saying hello to some of the others in reception when he arrived. I went to say congratulations; that was almost the first thing I did. I couldn’t really talk [to him] after the final; I just didn’t have it in me. The next day we talked about the game properly. Just two mates chatting … I was happy for him that he could lift the trophy for a second time.”
A high pressure game for the European champions, as Sid Lowe reports.
“If we had scored one, the game would have changed,” Martín Zubimendi said. Immediately after the game, De la Fuente had offered a simple analysis: when the ball doesn’t want to go in it doesn’t want to go in, he insisted. Spain had racked up 27 shots, after all. Ferran Torres had hit the bar and seen another clear opportunity saved. Vozinha, the 40-year-old goalkeeper who stopped that, saved six more and was named the man of the match. “There’s nothing to reproach the team for,” Rodri said. “We generated chances but couldn’t put it away; the good thing is they created almost nothing.”
We wait to see what role Lamine Yamal will play today. His coach would surely like to be able to use him.
The worst mistake we could make would be to compare him to anyone. He is the midst of a process. He has exceptional footballing maturity and lives it all with total naturalness. He has great serenity and strength. We have to let him follow his path but those players who have something different are ready for that. They’re geniuses, like Dalí [who] can paint a picture, or Michelangelo. They’re different. What is exceptional to us, isn’t to them. In those extremes, they feel comfortable. Why? Because they are different. What we think is exceptional, they consider normal.
Preamble
Spain’s campaign did not get off to a flying start, and Luis de la Fuentes may wake up in the night to visions of Cape Verde’s Vozinha. He will have Georgia on his mind ever since Monday. Saudi Arabia are no pushovers and gave Uruguay a scare in their opening match. Memories of downing Argentina four years ago still abound, and so Spain might beware. They can ill afford to go into the final game with Uruguay at a disadvantage. All eyes on Lamine Yamal, whose fitness situation remains opaque, though Spain need their other forwards to come to the party.
Kick-off 5pm UK, 1pm ET, 2am AEST. Join me.
A topless man can be seen driving erratically in Edinburgh before abandoning his car and attacking a black man and a delivery rider.
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