Market Update: Economic indicators: Key statistics for the UK economy – Full Analysis

Summary

The rise in energy prices due to the conflict in the Middle East is expected to lead to higher inflation in the UK. Petrol prices have already increased and household gas bills seem likely to increase later in 2026. Previously anticipated interest rate cuts by the Bank of England now seem unlikely to materialise, and rate hikes are now possible.

Gross domestic product (GDP) and productivity

GDP is estimated to have grown by 0.2% in November 2025 to January 2026 compared to the previous three-month period (August to October 2025). Eurozone GDP grew by 0.3% in October to December 2025.

Services output was up by 0.9% in November 2025 to January 2026 compared to the previous year.

Manufacturing output increased by 1.0% over the same period.

Productivity across the whole UK economy increased by 0.7% in Q3 2025 compared with the previous quarter. Compared with the previous year, it was up by 1.1%.

Inflation and interest rates

CPI inflation was 3.0% in January 2026, down from 3.4% in December 2025. Inflation in the Eurozone was 1.9% in February 2026, up from 1.7% in January.

The Bank of England’s Monetary Policy Committee (MPC) left interest rates unchanged at 3.75% on 19 March. Rates have been cut by 1.5 percentage points overall since August 2024.

Earnings and employment

Average wages excluding bonuses were 3.8% higher in the three months to January 2026 compared with the year before, and 0.5% higher after adjusting for inflation. CPI inflation for this period was 3.2%.

Data from the Labour Force Survey shows that 34.31 million people were in employment in November 2025 to January 2026, up 381,000 from a year before (but note that other data shows a fall in payrolled employees of 109,000 over the same period). The employment rate was 75.1%, up from 75.0% the previous year.

1.87 million people were unemployed in November 2025 to January 2026, up 323,000 from the year before. The unemployment rate was 5.2%. The UK harmonised unemployment rate for Q4 2025 was 5.2%, above the rate of Germany (3.9%) and the US (4.5%) but below that of France (7.9%).

Public finances

Government borrowing in the first 11 months of the 2025/26 financial year was £126 billion, which is £12 billion less than the amount borrowed in the same period in 2024/25.

At the end of February 2026, public sector net debt was equivalent to 93.1% of GDP, compared to 93.3% a year before.

Trade and exchange rates

The UK had a trade deficit of £6.0 billion in the three months to January 2026, compared to £12.5 billion in the three months to October 2025.

The current account deficit was £12.1 billion in Q3 2025 (1.6% of GDP), down from £21.2 billion in Q2 2025 (2.8% of GDP).

The value of sterling decreased by 0.3% between January and February 2026, having increased by 0.8% between December 2025 and January 2026. Compared with a year ago, it is 2.3% lower.

Retail sales and consumer confidence

The volume of retail sales rose by 0.1% in the three months to January 2026 compared with the previous three months, and increased by 2.6% compared with the previous year.

GfK’s Consumer Confidence Index, which measures consumer attitudes, was at -19 in February 2026, down by three points from January.

House prices

House prices increased by 2.4% in the year to December 2025.

Household debt

Household debt stood at 116.9% of disposable income in Q3 2025. This ratio has generally been decreasing since 2022.

Economic indicators are quick-read summaries of the latest data focusing on different aspects of the UK economy. The full suite of indicators can be found on the main Economic Indicators page.