US GDP Revision and UK Services‑Led Growth Highlight Q1 2026 Economic Trends

The U.S. Bureau of Economic Analysis revised first‑quarter 2026 GDP growth from 1.6% to 2.1%, attributing the increase largely to an accounting change on imports and, more fundamentally, to federal government spending, which now accounts for about two‑thirds of GDP. Near‑record corporate profits accompanied the upward revision, prompting analysts to warn that rising government debt could fuel inflation in the short and long term.

In the United Kingdom, official data showed the economy expanded by 0.6% in the first three months of 2026, with the services sector leading growth. “Services were the main driver of growth in the latest quarter, with strengths in computer programming, wholesale and advertising,” said Liz McKeown of the ONS. However, household disposable income fell 0.8%, savings ratios slipped, and the Bank of England kept interest rates at 3.75%, suggesting continued pressure on households. “Alongside softer household spending, tighter financial conditions and economic uncertainty will weigh on investment,” warned Matt Swannell of the EY ITEM Club, noting that fiscal policy is likely to remain tight.