In a welcome surprise for the UK economy, GDP growth for June beat expectations, coming in at 0.3% compared to economists’ forecasts of a 0.1% decline.
However, quarterly growth dropped to 0.4%, underscoring the economy’s fragility and its inability to fully avoid the impact of the conflict in the Middle East.
The World Cup played its part in helping boost growth in June, while lingering political uncertainty dampened enthusiasm.
The services sector was the main driver of growth during the period, while manufacturing held its own but made little contribution to economic expansion.
Jeremy Batstone-Carr, European Strategist at Raymond James, said: “The UK economy managed to weather the uncertainties surrounding the US war with Iran. Growth is subdued and has eased lower after a strong start to the year, but in common with the Euro Area, activity has thus far proved comparatively resilient.”
“The question as to whether that resilience can last going forward, especially given inevitable pre-Budget caution (again), remains to be seen. The Bank of England will likely view today’s data as vindication of its decision to maintain the base rate unchanged at 3.75%, a level it has held throughout 2026 to date.”