UK GDP Is Projected to Increase by 1.4% This Year Even as Employment Slows

Goldman Sachs Research: UK Economy Faces Another Challenging Year in 2026

According to a recent analysis by Senior UK Economist James Moberly and Chief European Economist Jari Stehn, Goldman Sachs Research projects that the United Kingdom will experience "another mixed year" economically in 2026. Their outlook suggests that UK GDP is set to rise by 1.4% from the fourth quarter of this year compared to the previous year, marking an improvement from the estimated 1% growth in 2025.

The economists anticipate that the labor market will continue to lose strength. However, they also expect that easing inflation and additional interest rate reductions from the Bank of England will provide some support to the economy. The report notes that in 2025, the UK labor market deteriorated considerably, impacted by sluggish economic expansion and higher national insurance contributions.