The UK economy grew by 0.4% between April and June, boosted by summer weather and sporting events, according to official data. This figure is in line with economists' expectations but is lower than the 0.6% expansion recorded in the first three months of the year.
The Office for National Statistics (ONS) reported that growth "remained relatively robust", with the services sector driving expansion in the second quarter, while manufacturing also saw growth. The economy is now 1.2% larger than it was a year ago, though economists anticipate a slowdown in the latter half of the year.
Areas of strength included computer programming, advertising, and the pharmaceutical industry, according to the ONS. These were partially offset by declines in power generation and sewerage.
The ONS noted that some businesses reported that "good weather and sporting events may have had a positive effect" in June, contributing to a month-on-month growth of 0.3% for that month. However, May's growth was revised down to zero from 0.1%.
The men's football World Cup, which began in mid-June, led to increased customer numbers at hospitality venues showing the matches. June also experienced several heatwaves.
The slowdown in growth over the three months to the end of June, compared to the start of the year, was attributed to the ongoing impact of the war in Iran and political uncertainty leading up to Sir Keir Starmer's resignation as prime minister at the end of June.
Chancellor of the Exchequer, John Healey MP, stated, "I know people are worried about the impact of the conflict in the Middle East on their cost of living, which has been too high for too long and it has added pressure on British businesses." He added that the government's objective is to make the country "more resilient" and to "drive growth in every postcode."
Shadow chancellor Sir Mel Stride commented that Labour had "mismanaged the economy with their tax and borrowing spree, leaving it weak and vulnerable to the effects of shocks like the Iran War." He asserted, "Labour need to realise that it's their poor decisions which have stifled growth and made the cost of living worse."
Fergus Jimenez-England, Associate Economist at the National Institute of Economic and Social Research, observed that the UK economy had "weathered the recent energy shock better than many feared," but cautioned that the current pace of growth is unlikely to be sustained. "Both inflation and unemployment are set to rise in the coming months while business sentiment remains fragile and could dampen further with ongoing energy price volatility. The economy has shown welcome resilience so far, but we are not out of the woods yet."
Key contributors to second-quarter growth included computer programming, consultancy and related activities (up 3.7%); advertising and market research (up 4.3%); and scientific research and development (up 3.9%).
Suren Thiru, ICAEW chief economist, suggested that households and firms had "largely shrugged off the shockwaves from the Iran war." However, he also anticipates weaker growth in the second half of the year, which would make the chancellor's October Budget "more challenging."
