Responding to the latest UK GDP figures, released by the Office for National Statistics today (Friday 13 March 2026), Suren Thiru, ICAEW Chief Economist, said:
“These figures confirm that the economy was treading water even before the significant economic shock unleashed by the Middle East conflict took hold, as weak services and industrial activity helped suffocate overall output in January.
“The UK economy could well have returned to modest growth in February, aided by a stronger manufacturing and services output, particularly with activity in the month almost entirely pre-dating the current turmoil.
“The Middle East conflict means that any lingering momentum in the economy has evaporated by now with the energy crisis and supply chain disruption pushing both the UK closer to stagflation and eroding the Chancellor’s fiscal headroom.
“While these disappointing figures will increase fears over the health of the economy, there is almost no hope of an interest rate cut next week given that rate-setters will be deeply concerned by the torrent of new inflation risks caused by the conflict.
“Though talk of rate rises is premature as policymakers will likely look through the immediate impact of surging energy prices, interest rate cuts will probably remain off the table until the Autumn at the earliest, even if a swift resolution to the crisis is found.”
ENDS
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* includes parent companies. Source: ICAEW member data March 2025, Interbrand, Best Global Brands 2024.
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