What is GDP?
GDP, or gross domestic product, is the total value of all the goods and services a country produces in a given period. It is the main measure of the size of an economy. When GDP rises, the economy is growing. When it falls for two quarters in a row, that is a recession.
The ONS estimates UK GDP every month and every quarter. It adds up spending by households, businesses and government, plus exports minus imports. UK GDP is a little over £3 trillion a year. In August 2026 GDP grew by 0.1%, and it grew 0.7% across the three months to August. Growth matters because a bigger economy usually means more jobs, higher wages and more tax to pay for public services. Many figures are compared to GDP, such as debt or borrowing, so they can be judged against the size of the economy. GDP has limits. It does not measure happiness, inequality or damage to nature. GDP per person is often a better guide to living standards, because GDP can rise just because the population grows.
The left often argues GDP is too narrow and wants well-being, inequality and climate measures to count alongside it.
The right often sees strong GDP growth as the best route to higher living standards, through lower taxes, less regulation and more enterprise.
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What is GDP per capita?
It is GDP divided by the number of people. It gives a rough idea of average living standards.
What is real GDP?
Real GDP strips out the effect of inflation, so it shows whether the economy is actually producing more.