UK Economy Grows 0.4% in Second Quarter
The UK economy grew by 0.4% quarter-on-quarter in the second quarter of 2026, slowing from the 0.6% growth recorded in the first quarter. This figure aligns with market expectations and indicates that the economy is continuing to expand, albeit at a decelerating pace.
The services sector was the primary driver of growth, expanding by 0.5%. Information and communication activity surged by 2.7%, while the professional, scientific, and technical sector grew by 1.7%. In contrast, the production sector overall remained stagnant, despite a 1% rise in manufacturing.
The construction sector grew by 0.3%, supported by an increase in new projects as well as repair and maintenance activities. On the expenditure side, gross fixed capital formation rose by 1.2%, while household consumption increased by 0.3%.
Conversely, government consumption fell by 0.3%, thereby limiting overall economic growth. The data demonstrates that investment and consumer spending continue to provide support, even though economic momentum is not as strong as in the previous quarter.
On an annual basis, UK GDP grew by 1.2%, up from 0.9% in the first quarter and exceeding market forecasts of 1.1%. This figure suggests that the UK economy remains stronger than previously anticipated.
Newsmaker Analysis: While slowing quarterly GDP growth could ease pressure on the Bank of England to maintain overly tight policies, the stronger-than-expected annual growth may provide support for the pound sterling. The future direction of the GBP will continue to depend on inflation trends and expectations regarding BoE interest rates. (asd)
Source: Newsmaker.id
