Commenting on ONS data that showed growth in GDP of 0.6% in Q1 2026, Anna Leach, Chief Economist at the Institute of Directors, said:

“Economic growth for the first quarter came in at a fairly punchy 0.6%, buoyed by some recovery in consumer and business spending following a weak final quarter last year. But there were early reports of turnover in some sectors being negatively affected by the outbreak of conflict in the Middle East – including in manufacturing, wholesale and accommodation. These are some of the sectors most exposed to geopolitical risk, with high vulnerability to energy costs and often complex global supply chains. There were also some signs of stockpiling in a handful of sectors – we had already seen in retail sales data for March that fuel sales picked up. This activity may soften the initial impact from the crisis.

“As the conflict drags on, the government’s narrative in the King’s Speech rightly focused on economic security, including sovereign capabilities in steel, improving infrastructure, market conditions and regulations. Energy security was rightly there too, although a plan to maximise the benefits from UK oil and gas fields remains worryingly absent. As energy costs rise, swift action is needed to address the other costs businesses face – reducing regulatory burdens and speeding up policy decisions can play a role in driving a more resilient economy.”

The CBI's Senior Lead Economist, Ben Jones, said: “The rebound in GDP growth in the first quarter looks unusually strong, largely reflecting February’s outsized gain. This pace of growth is unlikely to be sustained, particularly as the effects of the Iran conflict begin to be felt.

“With higher fuel and energy costs feeding through and disruption to global supply chains set to intensify the longer the Strait of Hormuz remains closed, pressures on businesses will mount, creating headwinds that are likely to weigh on growth through the remainder of 2026.”

“As the economic impact of the conflict becomes clearer, businesses will be looking to government to take further action to tackle the cost of doing business. This includes taking policy-related costs off business electricity bills, tangibly cutting the regulatory burden, and finding appropriate landing zones on the Employment Rights Act.”