Capital Economics: Strong economic momentum in the UK at the beginning of 2026 may have come to an end.

Ruth Gregory, the macroeconomist at Capital Economics, stated in a report that although the UK's GDP saw a significant increase of 0.5% month-on-month in February, the activity PMI in March indicates that the war in Ukraine has almost completely stifled growth. She mentioned that it is encouraging to see some of the industries most affected by the surge in energy prices performing well in February. Energy-intensive industries such as mining and quarrying, transport and storage, wholesale and retail, as well as arts and entertainment, all saw strong growth. Gregory said that the better-than-expected output in February could mean a quarterly GDP growth of around 0.6% in the first quarter, instead of the previously estimated 0.3%. However, she also noted that the surge in energy prices means that the economy is unlikely to see much further growth after that.