UK economy grows 0.4% in second quarter

The United Kingdom economy grew 0.4% in the second quarter of 2026, matching forecasts, according to the Office for National Statistics first quarterly estimate for April to June published August 13. That is a slowdown from 0.6% in the first quarter.

The composition was services-led. Services output rose 0.5%, construction rose 0.3%, and production was flat at 0%. On a monthly basis June GDP rose 0.3%, beating expectations, after a flat May and a 0.1% contraction in April, so the quarter's momentum improved into the end of the period rather than fading.

The resilience is notable because it came despite energy price pressure that businesses have been absorbing rather than passing through. Flat production output is the weak spot: manufacturing has not recovered, and the whole of the quarter's growth is carried by services.

For markets the read is on Bank of England policy rather than on growth itself. An in-line print that decelerates from the prior quarter but improves month over month gives the Monetary Policy Committee no clear reason to change course, which is why the reaction was muted. The sequence that would matter is production staying flat while services growth cools, since that removes the single engine currently carrying the economy. Watch the monthly GDP prints and the services PMI ahead of the next MPC meeting.