UK GDP Growth Revised Upward to 0.5 Percent

The Office for National Statistics revised the United Kingdom's second-quarter GDP growth upward to 0.5%, increasing the previous estimate of 0.4%. This follows a 0.6% growth rate in the first quarter, establishing the UK as the fastest-growing economy among the Group of Seven for the first half of 2026. Growth was primarily driven by a 0.6% increase in the services sector—bolstered by the World Cup and hot weather—and the construction sector, while the production sector contracted by 0.1%.

Business investment saw a significant upward revision to an annual rate of 5.2%, a trend analysts attribute to an AI-driven investment wave. Additionally, real household disposable income per head rose by 1%, recovering from a first-quarter decline. The nation also reduced its current account deficit to £19.9 billion, and its borrowing position with the rest of the world decreased to 2.8% of GDP.

Despite these gains, the agency revised 2025 growth downward to 1.2% from 1.3%. Economists warn of a slowdown in the fourth quarter due to high fuel prices and budget uncertainty. Cornwall Insight predicts annual household energy bills could rise by 16% in January. In the corporate sector, Greggs reported 7.7% sales growth but announced plans to cut 740 jobs to maintain cost-efficiency.