UK GDP Growth Projected to Reach 1.1% in 2026 and 1.2% in 2027

The UK's gross domestic product (GDP) growth is projected to reach 1.1% in 2026 and 1.2% in 2027, according to HM Treasury's Forecasts for the UK Economy August 2026.

For 2026, the average of forecasts received in August puts Consumer Price Index (CPI) inflation at 3.4% in the fourth quarter, Retail Prices Index (RPI) inflation at 4.2%, and Labour Force Survey (LFS) unemployment rate at 5.2%. The current account is forecast at minus £95 billion (~$128.4 billion), while Public Sector Net Borrowing (PSNB) for 2026-27 is forecast at £121.8 billion (~$164.6 billion).

For 2027, forecasts received in August show CPI inflation easing to 2.2% in the fourth quarter and RPI inflation to 3.2%. The LFS unemployment rate is forecast at 5.1%, the current account at minus £98.8 billion (~$133.5 billion), and PSNB for 2027-28 at £104.2 billion (~$140.8 billion).