UK Growth Persists Despite Economic Pressures

The UK economy is expected to have expanded for a second consecutive quarter, showing resilience despite supply chain disruption, rising prices and political uncertainty. Economists forecast that gross domestic product increased by 0.4 per cent between April and June.

The expected rise would follow growth of 0.6 per cent during the first quarter of 2026. Official figures from the Office for National Statistics are due on Thursday and will provide a clearer assessment of economic performance during the period.

Growth was supported by stronger services activity in May, particularly across professional services and scientific research and development. Manufacturing companies also built inventories in anticipation of supply shortages and price increases linked to the conflict in Iran. This stockpiling helped maintain economic activity, although it may not provide lasting support.

The outlook for June is less certain. Rob Wood, chief UK economist at Pantheon Macroeconomics, expects monthly GDP to have declined by 0.1 per cent. He said weaker construction activity was likely to have reduced growth, while services and industrial production may have remained unchanged.

Thomas Pugh, chief economist at RSM UK, forecasts a 0.1 per cent increase for June. He expects stronger mining activity to have offset pressure elsewhere. Hospitality may have weakened despite the start of the Fifa World Cup, as consumers appeared to shift spending from restaurants to pubs rather than increase their overall expenditure.

Hot weather produced mixed conditions for businesses, although England’s progress to the World Cup semi-finals could support consumer activity in July. Higher inflation continues to place pressure on household budgets and operating costs.

Quarterly growth would provide an early economic boost for Prime Minister Andy Burnham, who has promised growth across all parts of the country. However, uneven performance across construction, hospitality and manufacturing indicates that the recovery remains exposed to inflation, supply constraints and external uncertainty.