The UK economy recorded a 0.4% growth in the second quarter of 2026, aligning with economists' forecasts. This growth was particularly strong in June, which saw a 0.3% increase in GDP after stagnation in May.
The Office for National Statistics (ONS) indicated that the services sector was the primary driver of growth in the latest quarter, expanding by 0.5%. The construction sector also saw an increase of 0.3%, while production output remained unchanged.
Businesses anecdotally cited the FIFA Football World Cup, which began on 11 June 2026, and warmer weather as contributors to increased turnover in June. These factors reportedly benefited industries such as alcohol manufacturing, wholesale, food and beverage services, publishing, television production, and advertising, as well as retail, accommodation, and recreation activities. However, the warm weather was also cited as having negative impacts on construction and education, with some schools closing due to the heatwave.
Chancellor John Healey acknowledged public concerns regarding the Middle East conflict's impact on the cost of living and British businesses. The ONS stated that while the US-Israeli war on Iran, which began in late February, has been a dominant global economic narrative, its exact effects on the UK economy remain unclear. Fewer businesses referred to the Iran war in June 2026 compared to previous months, coinciding with a period of ceasefire.