UK economy grows but experts warn of challenging months ahead

Here is a story making headlines in the economy: UK economy grows but experts warn of challenging months aheadImage source, Getty ImagesByLucy HookerBusiness reporterPublished13 August 2026Summer sun and sports fixtures helped the UK economy grow between April and June, according to official data, but some economists warned the outlook for the rest of the year was weaker. The economy expanded by 0. 4%, in line with market expectations but below a 0.

6% increase in the first three months of this year. The Office for National Statistics (ONS) said growth had "remained relatively robust", with the UK ahead of other G7 countries for growth this year so far. Experts questioned whether this resilience would be maintained, however, given growth was fuelled by some temporary factors and energy prices could remain volatile if the Middle East conflict continues.

Economic Details

The British economy is now 1. 2% bigger than a year ago, the ONS said, despite fears that the Iran war, which started at the end of February, and politically uncertainty around Sir Keir Starmer's resignation as prime minister would hold back growth. Between April and June, sectors including computer programming, advertising and the pharmaceutical industry lifted growth.

That was offset by falls in power generation and sewerage. The ONS said some businesses reported that "good weather and sporting events may have had a positive effect" in June, boosting month-on-month growth to 0. The men's football World Cup, which kicked off mid-June, increased customers at hospitality venues showing the matches.

June also saw several of summer's heatwaves. However, May's growth was revised down from 0. Fergus Jimenez-England, associate economist National Institute of Economic and Social Research said the UK economy had "weathered the recent energy shock better than many feared".

Analyst Views

Matt Harwood, director of Clarity Plastics, a plastic injection moulding company with sites in Birmingham and Telford, said that while the conflict had affected costs for things like raw materials, there had since been some stabilisation. "When the Iran war started, availability went down and prices went up," he said. "However, we're seeing that kind of level out now, and prices coming back to the kind of the normal levels again.

"We've tried to stay resilient by carrying on investing. We're now installing a large 1500-ton machine... that's kind of giving us a competitive edge now as well.

"But Jimenez-England said the recent pace of growth for the UK economy was 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.

Economists are analysing what the news means for the markets.