NatWest's Britonomics update reviews the latest UK economic data, highlighting stronger-than-expected growth alongside persistent inflation pressures, a cooling housing market and growing financial stability risks.
- UK GDP strengthened in the first quarter of 2026 as consumer spending, business investment and government expenditure supported growth, although household incomes remained under pressure from inflation.
- NatWest notes that inflation expectations remain elevated despite moderating wage growth, while recent comments from Bank of England policymaker Catherine Mann reinforce the possibility that interest rates may need to stay higher for longer.
- The report also highlights emerging systemic risks from AI adoption in financial markets and echoes the BIS's warning that elevated leverage, fiscal pressures and financial vulnerabilities could challenge global stability.
Read the full update for NatWest's latest assessment of the UK economy, monetary policy and broader macroeconomic risks.
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