The UK economy grew 0.4% between April and June, per the ONS, below the 0.6% growth in the first quarter but ahead of other G7 nations so far this year. Growth was helped by computer programming, advertising, and pharmaceuticals, offset by falls in power generation and sewerage, with good weather and the men's football World Cup boosting hospitality in June.
Economists including NIESR's Fergus Jimenez-England and ICAEW's Suren Thiru warned the resilience relied on temporary factors and won't be sustained, with inflation and unemployment expected to rise. The Treasury reportedly warned Prime Minister Andy Burnham that growth could be as low as 0.3% in 2027 if Strait of Hormuz disruption continues.
Chancellor John Healey acknowledged cost-of-living pressure from the Middle East conflict while pledging to build resilience, while opposition figures blamed Labour's tax and spending choices for a weak, shock-vulnerable economy. A business owner in plastics manufacturing said war-driven cost spikes have since stabilized.
The full dispatch is available from the source below.