UK Economy Grows 0.4% Meeting Second Quarter Forecasts London 2026

Key Points

• Gross Domestic Product (GDP) in the UK expanded by 0.4% quarter-on-quarter in the three months to June 30.
• The 0.4% expansion represents a deceleration from the 0.6% growth recorded in the first quarter of the year.
• Quarter-on-quarter growth matched consensus estimates cited by financial data provider FXStreet.
• Sectoral performance was led by a 0.5% increase in services output, alongside a 0.3% rise in construction, while industrial production output recorded zero growth.
• Year-on-year GDP growth accelerated to 1.2% in the second quarter, up from 0.9% in the previous quarter and surpassing the FXStreet consensus forecast of 1.1%.

London (West London News) August 13, 2026 – The United Kingdom’s gross domestic product grew by 0.4% in the second quarter of the year, official figures published on Thursday demonstrate. The quarterly expansion matches market predictions, though it marks a modest deceleration compared to the pace set at the start of the year.

How Did the UK Economy Perform in the Second Quarter of the Year?

According to data released by the Office for National Statistics (ONS), UK gross domestic product advanced by 0.4% on a quarter-on-quarter basis during the three months ending June 30. This figure indicates a moderation in economic momentum when measured against the 0.6% expansion achieved during the first quarter of the year.

As cited by market commentary from FXStreet, the 0.4% quarter-on-quarter increase was in line with the consensus forecast compiled ahead of the release.

The deceleration reflects a cooling of initial momentum observed early in the calendar year, though economic output continues to maintain a positive trajectory.

Which Sectors Drove Economic Growth Between April and June?

The breakdown of output across the economy revealed variable performance across key industries during the second quarter.

As reported by the Office for National Statistics,

“In output terms, growth in the latest quarter was mainly caused by an increase of 0.5% in the services sector; the construction sector increased by 0.3% and production output showed no growth.”

The dominant services industry, which forms the core of the UK economy, provided the primary momentum for overall national growth. Construction activity recorded a minor expansion, while manufacturing and industrial production output remained flat across the three-month period.

How Does the Annual Growth Rate Compare Against Consensus Estimates?

When evaluating the economy on an annualised basis, the statistics highlight an acceleration in output compared to earlier periods.

As stated by the Office for National Statistics, year-on-year UK gross domestic product grew by 1.2% in the second quarter. This annual reading outperformed expectations, beating the FXStreet cited consensus forecast of a 1.1% rise.

Furthermore, the 1.2% annual rate shows an acceleration from the 0.9% year-on-year growth recorded in the first quarter.

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What Is the Background to This Economic Development?

This latest quarterly data follows a period of shifting economic performance across the United Kingdom. After facing stagnant conditions and elevated inflation in previous years, the UK economy experienced a rebound in the first quarter with a 0.6% growth rate.

The subsequent slowing to 0.4% in the second quarter aligns with broader expectations of economic normalization.

While the services sector continues to serve as the main engine of UK economic output, industrial and production output have faced persistent headwinds, resulting in the flatline recorded in the latest official figures.

What Is the Future Outlook for Businesses and Households?

The moderation in economic growth to 0.4% alongside an annual rise of 1.2% suggests a steady but moderate trajectory for the UK economy.

For households, the ongoing expansion in the services sector indicates continued stability in key service industries, though flat production output highlights underlying structural pressures in manufacturing and industrial sectors.

For businesses, meeting baseline growth forecasts provides a predictable economic backdrop, though the slowing quarter-on-quarter expansion points to cautious consumer spending and measured business investment moving forward.