Official data has revealed that the UK economy grew by 0.4 per cent between April and June. This quarterly reading was accompanied by a surprise growth figure of 0.3 per cent in June, which exceeded analysts' expectations.
However, figures for May were revised down from 0.1 per cent growth to no growth. City economists polled by Bloomberg had anticipated 0.4 per cent growth for the second quarter but predicted a 0.1 per cent decline in total product value for June.
The services sector was a key driver for the UK economy during this period, expanding by 0.5 per cent. Manufacturing activity remained flat, while the construction sector saw an expansion of 0.3 per cent. Liz McKeown, director of economic statistics at the ONS, noted that growth in the second quarter was slower than the 0.6 per cent increase recorded in the first three months of 2026, but remained "relatively robust."
Concerns about a potential slowdown for the rest of the year have been raised. The Treasury reportedly warned that the UK economy could grow by just 0.3 per cent if the Strait of Hormuz remains blocked for the rest of the year. The Bank of England has also indicated it would raise interest rates under the same scenario. Economists at EY have cautioned that the UK economy could enter a recession if oil and gas supplies from the Gulf region are disrupted.