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The UK economy experienced growth between April and June, buoyed by favorable summer weather and sporting events, according to official figures. The Office for National Statistics (ONS) reported a 0.4% expansion during this period, a pace that matched market predictions but was slightly below the 0.6% increase seen in the opening months of the year. The ONS described the growth as “relatively robust,” with the UK outperforming other G7 nations in economic growth so far this year.
Despite these positive signs, economists expressed caution about the sustainability of this momentum. Much of the recent growth was attributed to short-term factors, including a boost from sectors such as computer programming, advertising, and pharmaceuticals, while declines were noted in power generation and sewerage industries. The ONS highlighted that businesses saw a positive impact from “good weather and sporting events” in June, with the men’s football World Cup final increasing patronage at hospitality venues. Additionally, several heatwaves in June further stimulated economic activity, although growth for May was revised downward to show no growth at all.
Commenting on the overall economic climate, Fergus Jimenez-England, associate economist at the National Institute of Economic and Social Research, noted that the UK had “weathered the recent energy shock better than many feared.” Matt Harwood, director of Clarity Plastics, acknowledged that while the conflict in Iran had initially driven up raw material costs and limited availability, prices have started to stabilize. Harwood said, “When the Iran war started, availability went down and prices went up. However, we’re seeing that kind of level out now, and prices coming back to the kind of the normal levels again.” His company is investing in new machinery that will provide a competitive advantage moving forward.
Nonetheless, concerns remain about the future trajectory of the economy. Jimenez-England warned that “both inflation and unemployment are set to rise in the coming months while business sentiment remains fragile and could dampen further with ongoing energy price volatility.” He added, “The economy has shown welcome resilience so far, but we are not out of the woods yet.” This caution was echoed in warnings to Prime Minister Andy Burnham by the Treasury, which suggested UK growth could slow to 0.9% this year and potentially fall as low as 0.3% in 2027 if disruptions in the Strait of Hormuz persist.
Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, pointed out that much of the second-quarter growth was driven by “temporary factors” and predicted a “more painful deceleration” in the coming months. He noted that this slowdown could complicate Chancellor John Healey’s first Budget in October. In response to the latest figures, Healey acknowledged public concerns linked to the Middle East conflict’s impact on the cost of living and business pressures, emphasizing the government’s commitment to making the economy “more resilient” and to “drive growth in every postcode.” Meanwhile, Shadow Chancellor Sir Mel Stride criticized the current administration, asserting that Labour had “mismanaged the economy with their tax and borrowing spree,” which he claimed left it vulnerable to shocks such as the Iran war, and argued that the party needed to recognize how its decisions had stifled growth and worsened living costs
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