What's happened
UK GDP has been revised up to 0.5% in Q2, driven by stronger services and construction, while annual figures for 2025 are trimmed. Economists warn of tougher months ahead as energy costs weigh on households and inflation remains above target.
What's behind the headline?
Critical Analysis
- The upward revision signals resilience in the UK economy amid global headwinds, but limits to growth are evident as energy prices and inflation persist.
- The shift underscores how service-sector momentum and capital investment, including data centres, are driving the economy, potentially benefiting the Chancellor's budget planning.
- Readers should monitor energy price caps and inflation, which remain central to household finances and monetary policy decisions.
Forecast: With energy pressures and potential rate moves, growth may slow into year-end, though investment and export gains offer support.
How we got here
The latest National Accounts show Q2 growth at 0.5% (from 0.4%), with services up 0.6% and construction up 0.8%; production contracts. 2025 growth is revised down to 1.2%. The revisions come as the Iran war environment and energy costs influence momentum, while a buoyant services sector supports a larger economy than previously estimated.
Our analysis
The Guardian reports the Q2 upgrade to 0.5% with services leading; The Mirror notes the same revision and adds cautions from economists about year-end momentum; both reference ONS data and comments from Liz McKeown and Martin Beck, contributing to a cautious but improving outlook.
Go deeper
- Will the energy price cap changes alter consumer spending this winter?
- Are investment and exports enough to sustain growth through the next quarter?
- How might the Budget respond to revised 2025 figures?
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