Responding to the latest GDP data published this morning by the Office for National Statistics, David Bharier, Head of Research at the British Chambers of Commerce said:
“GDP growth of 0.5% in the three months to February shows the UK economy performed better than expected at the start of the year, with signs that momentum was building.
“But this data predates the Iran conflict, so the full impact of the energy and shipping shocks has yet to come through. Forecasts are being downgraded – we are now expecting just 1% for 2026, and the IMF this week warned the UK will be the hardest hit of the G7.
“Cost pressures remain the top constraint for most firms. Our latest survey shows 73% cite labour costs and 52% cite energy costs as price drivers, even before the escalation in the Middle East. For two years, we’ve seen more SMEs cutting back investment than increasing it.
“In the short term, de-escalation and rapid recovery to supply chains is the only way to prevent a deeper economic crisis.
“Longer term, the UK will only break out of this low-growth trap by unlocking investment, boosting exports, and harnessing the game-changing productivity potential of AI.”