Image source, Getty Images

While this morning’s numbers have been resilient, many experts fear that growth will slow as the year goes on.

That could be significant for mortgages, which are heavily dictated by the Bank of England (BoE)'s base interest rate.

Thomas Pugh, an economist at RSM, says the likelihood of growth getting slower this year “should allow it [the Bank] to keep interest rates on an extended hold this year”.

The base rate, currently sitting at 3.75%, also influences how expensive it is for people to take out a loan.

The BoE usually raises it to curb inflation, while it cuts the base rate to spur more growth. Here's more on how it works.

However, GDP is only one piece of the puzzle, and Pugh added that interest rates will also be heavily dependent on "how energy prices evolve over the rest of the summer”.

Theo Leggett
Business correspondent

There seems to be a widespread consensus among experts that the UK economy has so far proved resilient in the face of "headwinds" such as uncertainty over tariffs and the impact of the conflict in the Middle East.

But equally, there is no shortage of measured pessimism about the months to come.

There have been plenty of warnings this morning that growth is likely to slow over the next few months as cost pressures mount for households and businesses.

There are also worries that uncertainty over the direction of new Prime Minister Andy Burnham’s government may prompt businesses to sit on their hands ahead of the Autumn Budget - for example, as they wait to see what changes to tax rules could come in.

That too could restrict growth, at least in the short term.

Let's recap on what this morning's figures tell us:

• Two key figures: The economy grew by 0.4% in the second quarter of the year and 0.3% in the month of June
• Good or bad? "Relatively robust" - those were the words used by the ONS' director of economic statistics. Today's quarterly figure was in line with economists' expectations but behind the 0.6% growth seen in the first quarter
• What's driving growth? The services sector - including areas like computer programming and advertising - was the main driver of growth during the quarter
• What next? Chancellor John Healey says the UK needs to "double down and drive growth in every postcode". But the government has been warned the economy could barely grow next year if disruption from the Iran war continues

Image source, Getty Images

Shadow chancellor Sir Mel Stride accuses Labour of making the economy worse, saying that this morning's GDP figures suggest it's "struggling".

"Labour have mismanaged the economy with their tax and borrowing spree, leaving it weak and vulnerable to the effects of shocks like the Iran war.

He also claims that Prime Minister Andy Burnham is "gearing up to tax and borrow even more, doubling down on those failures".

"Labour need to realise that it’s their poor decisions which have stifled growth and made the cost of living worse."

Alex Daniel
Business reporter

Experts are generally agreeing that the consumer side of the economy - things like shops, pubs and other businesses - have done surprisingly well in the face of things like the Iran war.

That could be partly to do with the good weather this summer, according to Yael Selfin, chief economist at KPMG, who says consumers have weathered economic shocks “remarkably well".

But experts also broadly agree that it will be difficult for this momentum to continue, especially with positives like the World Cup out of the way.

Suren Thiru, chief economist for the Institute of Chartered Accountants in England and Wales, calls this “resilience with an asterisk”, pointing out that these are all temporary factors rather than “genuine momentum”.

He says the “growing financial squeeze” sparked by the Iran war means this upturn will be “difficult to sustain”.

Image source, Reuters

Former chancellor Rachel Reeves - who was in Number 11 during the period covered by this morning's report - has called the growth figures "strong", adding that this was "not inevitable".

"It is because of the resilience of the British economy and the responsible action taken since the election to deliver stability, investment and reform," she writes on X.

"Lots done, more to do," she adds.

Reeves was replaced by John Healey when Andy Burnham became prime minister last month.

The growth figures are a “reflection of an economy that has remained resilient in the face of global headwinds - namely trade conflict and geopolitical volatility - and a period of political turbulence at home”, says Joe Nellis, the head of economic research the accountancy and advisory firm at MHA.

“But forecasts suggest that the economy will continue to lose momentum as we enter the second half of 2026, and the new chancellor faces a number of challenges as we head towards the Budget in October," he adds.

“Consumer spending remains constrained, businesses continue to adjust to higher costs and investment spending is vulnerable to uncertainty over taxation, regulation and the ongoing tensions in the Middle East.”

Responding to today's figures, Chancellor John Healey says the UK has seen the "fastest growth in the G7 this year" but now needs to "double down and drive growth in every postcode".

"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 says.

He calls Burnham's government "active" and "hands-on", putting "British interests first" and "giving breathing space to those feeling the strain".

Theo Leggett
Business correspondent

The UK economy grew by 0.4% in the three months from April to June.

That was slower than in the first quarter - with no growth at all in May - but was still described as "relatively robust" by the ONS’ director of economic statistics, Liz McKeown.

The main driver was services - in other words, things like banking, insurance, restaurants and hotels.

McKeown says some businesses were reporting that "good weather and sporting events" might have had a positive impact in June.

In other words, there may have been a World Cup effect.

Dearbail Jordan
Business reporter

Economic growth slowed to 0.4% between April and June, this data shows.

The figure - in line with economists' expectations - is below the 0.6% growth for the first three months of this year.

Commenting on today's GDP figures, ONS director of economic statistics Liz McKeown says: "Growth slowed in the second quarter of the year, following a strong start to 2026, but remained relatively robust.

"Services were once again the main driver of growth, while production was broadly unchanged and construction also grew."

GDP rose by 0.3% in June, the latest figures show.

As a reminder, we also had the second-quarter figure from the Office for National Statistics (ONS) this morning - details on that in our previous post.

The UK economy grew by 0.4% in the second quarter of the year, official figures show.

Stick with us for analysis, including what this means for you.

In just a few minutes, at 07:00 BST, we'll get the latest GDP figures from the Office for National Statistics (ONS), showing how much the UK economy grew in the second quarter of this year.

Economists are expecting growth of 0.4% for the three months from April to June.

Businesses have been finding ways to cope with the effects of the Iran war, with manufacturers stockpiling to mitigate against supply shortages and price rises.

The period also included political uncertainty in the run-up to Sir Keir Starmer’s resignation as Prime Minister in June and the first of several summer heatwaves in May, putting some industries under pressure.

We'll bring you the figures - as well as the monthly GDP estimate for June - and analysis shortly. Stay with us.

Image source, EPA

There has been a "very clear seasonal pattern" over the past decade of growth doing well in the first half of the year, before slowing down in the second half, says Simon French, chief economist at Panmure Liberum.

While it could be a "statistical anomaly", he tells Radio 4's Today programme that events in the second half of the year - including the Budget - cause businesses to "sit on their hands".

"Every year, speculation over changes in tax and spending have caused a delay in activity," he says.

This year's Autumn Budget is due on 28 October.

Image source, PA Media

Today's figures come at a time of growth concerns as disruption as the Iran war continues.

Prime Minister Andy Burnham has been warned the UK economy could barely grow next year, if disruption in the Strait of Hormuz continues until the end of 2026.

Treasury sources have confirmed internal modelling presented to the PM and chancellor - representative of a reasonable worst-case scenario - suggests UK GDP growth could be as low as 0.3% in 2027, as first reported by Bloomberg.

Under the modelling, inflation would peak at 4.3% in the first three months of next year. It currently stands at 2.6%.

Government officials say they routinely plan for all possible scenarios.

The latest GDP figures should show the impact of several things that occurred in the three months to June.

Economists are expecting growth of 0.4% for that three month period, according to estimates.

Businesses continued to find ways to cope with the effects of the Iran war, with manufacturers stockpiling to mitigate against supply shortages and price rises.

But the period also included political uncertainty in the run-up to Sir Keir Starmer’s resignation as prime minister on 22 June.

The first heatwave also came in May, which put some industries under pressure.

Monthly GDP is expected to have dipped by 0.1% in June, according to consultancy Pantheon Macroeconomics.

Nick Edser
Business reporter

The UK's economy returned to growth in May, but the expansion was modest as businesses were affected by the impact of the Iran war.

The economy grew by 0.1%, the Office for National Statistics (ONS) said, driven by expansion in the UK's service sector, although this was offset by falls in the production and construction sectors.

May's growth comes after a slight contraction in April, and analysts said the latest figures suggested the economy had weathered the rise in energy prices caused by the conflict in the Middle East better than expected.

However, others noted the UK economy remained "fragile".

Over the three months to May, the ONS said the economy grew by 0.7% compared with the previous three-month period.

Today’s figures show how the UK economy is performing, using a measure called Gross Domestic Product (GDP).

What is it?

GDP measures the economic activity of companies, governments, and people, and affects things like pay increases for workers and how much tax the government can raise to pay for services.

But the measure doesn’t tell the whole story, especially important aspects of people’s living standards or how wealth is shared.

What does it show?

Generally, economists, politicians, and businesses prefer GDP to grow steadily – as it means people are spending more, more jobs are being created, and more tax is being paid.

If GDP shrinks for two quarters in a row, this is known as a recession, which can lead to pay freezes and job losses.

The latest figures showing how the UK economy performed are about to be released.

At 07:00 BST, the Office for National Statistics (ONS) will reveal the Gross Domestic Product figures for April to June 2026.

Economists are expecting to see growth of 0.4%.

GDP measures the size and health of a country’s economy by assessing how much is produced, spent and earned over a period of time.

Stay with us for the latest updates and analysis throughout the morning.