UK Beats G7 Peers with 0.6% Q1 Growth Amid Iran Conflict

### Context The first three months of 2024 unfolded against the backdrop of the Iran‑Israel war, a shock that has rattled global markets and raised fears of a broader energy crisis. Many analysts, including the International Monetary Fund, warned that the United Kingdom would feel the sharpest impact among advanced economies. Yet the latest national accounts show a different story.

### Key Facts - Gross domestic product (GDP) rose 0.6% from January to March, a notable rebound after a period of sluggish growth. - GDP per capita, which measures output per person, posted its highest quarterly increase since early 2020, the start of the energy shock triggered by Russia’s invasion of Ukraine. - Among the G7 – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – the UK posted the strongest quarterly growth. Japan’s pending data are expected to lag behind the British figure. - Growth was broad‑based: services, construction and manufacturing all expanded, while wholesale and retail trade signaled resilient consumer spending. The information and communications sector also performed well, reflecting strong investment in AI and technology. - Some areas lagged, notably machinery and equipment and administrative services, and the housing market faces pressure from higher mortgage rates. - Consumer confidence dipped in the latest survey, reflecting rising fuel and mortgage costs that could temper future expansion.

### What It Means The data suggest the UK’s economy is more insulated from the current oil‑focused shock than many peers, partly because domestic energy bills have been shielded from wholesale price spikes. The per‑capita gain indicates that growth is not solely a product of population increase; individuals are, on average, producing more value.

However, the dip in consumer confidence warns that household budgets remain strained. Persistent fuel price hikes and tighter mortgage terms could erode the current momentum, especially if the Gulf conflict drags on and disrupts oil shipments through the Strait of Hormuz.

Policymakers will be watching upcoming data on employment, inflation and the housing sector to gauge whether the Q1 surge can be sustained. The next quarter’s figures will reveal if the UK can maintain its lead within the G7 or if the broader geopolitical turbulence will finally bite.

What to watch next: Q2 GDP releases, consumer confidence trends, and any resolution to the Iran‑Israel conflict that could stabilize oil markets.