The UK economy expanded by 0.4% during the second quarter of 2026, matching economists’ expectations but slowing from the 0.6% growth recorded during the opening three months of the year, according to preliminary figures from the Office for National Statistics.
While the headline quarterly figure pointed to a loss of momentum, the underlying data provided some more encouraging signs, particularly towards the end of the period.
June GDP Beats Expectations
June delivered the strongest monthly performance of the quarter, with GDP increasing by 0.3%. The result comfortably exceeded forecasts that had pointed to a modest contraction.
The rebound followed a flat reading for May, which was revised down from the previously estimated 0.1% increase. GDP contracted by an unrevised 0.1% in April.
June’s stronger performance therefore helped compensate for the subdued start to the quarter, although overall economic growth still moderated compared with the first quarter.
Services and Construction Support Growth
Services, which account for the largest share of UK economic activity, expanded by 0.5% during the second quarter and provided the main contribution to growth.
Construction output increased by 0.3%, while overall production was unchanged. Improvements in manufacturing were offset by weaker activity across electricity, gas and water supply.
The figures underline the continuing importance of the services sector to the UK’s economic performance while showing a more uneven picture across industrial activity.
Investment and Household Spending Rise
Looking at expenditure, gross fixed capital formation was one of the principal contributors to second-quarter growth, increasing by 1.2%.
Household consumption also provided support, rising 0.3% during the period.
Government consumption moved in the opposite direction, falling 0.3%. The decline partly reflected lower spending on health and education, with weaker education activity potentially linked to school closures during the June heatwave.
GDP Per Head Shows Improvement
Real GDP per head, which can provide a closer indication of changes in living standards than overall economic output, increased 0.4% during the quarter.
Compared with the same period a year earlier, real GDP per head was 1% higher, indicating that economic growth continued to outpace population effects on an annual basis.
Nominal GDP, which measures economic output at current prices, increased 0.8% during the quarter and was 4.1% higher year-on-year.
According to the ONS, much of the increase in nominal output was attributable to stronger gross operating surplus.
June Rebound Provides More Positive Signal
Although the slowdown from first-quarter growth indicates that the UK economy lost some momentum during the spring, June’s stronger-than-expected expansion provides a more positive signal heading into the second half of 2026.
Growth across services, investment and household consumption also suggests that activity was relatively broad-based in several important areas of the economy. However, stagnant production and weaker government consumption highlight continuing areas of softness.
The strength of subsequent monthly data will now be important in determining whether June represented the beginning of renewed economic momentum or simply a rebound following the weaker start to the second quarter.
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