UK economy grows in Q2

GDP rose 0.3% in the quarter, beating forecasts but underscoring underlying fragility.

UK economy grows 0.3% in second quarter

Official data show the UK economy grew 0.3% in the three months to June, slower than the 0.7% pace in the previous quarter but above forecasts. June alone rose 0.4%, helped by services such as computer programming and health care, while construction also climbed and production slipped. Updated source data lifted April’s figure, showing a milder contraction than first estimated.

Economists say the gain is modest and built on a temporary pull forward of activity. The chancellor, Rachel Reeves, has pledged to use the autumn budget to lift productivity and invest in infrastructure, while the Bank of England weighs the path for interest rates. Critics warn that the improvement could fade if policy does not address longer term growth and living costs.

This data shows resilience but not a cure. Growth is driven by a few service sectors, and the June pickup hints at momentum, yet the quarterly pace remains weak by historic standards.

Policy choices will decide if this is a turning point. The Bank of England may delay rate cuts if inflation stays high, and Reeves faces a test to turn a one off gain into lasting productivity gains. The autumn budget will reveal how the government balances growth with fiscal discipline and political risk.

Highlights

Policy choices in the autumn budget will shape the pace of any recovery.