UK GDP report to show how Iran war hurt economy in March – business live

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.”