UK Growth Holds Firm Despite Geopolitical Headwinds

The UK economy is entering the second half of 2026 with stronger momentum than expected, although higher energy costs remain a significant constraint on the outlook.

• GDP rose 0.4% q/q in Q2 and 0.3% m/m in June, marking the fourth upside surprise in five months.
• Business activity broadened sharply, with 10 of 12 UK regions reporting growth in July; labour-market conditions also showed tentative stabilisation.
• Higher energy prices linked to the Iran conflict could reduce GDP by an estimated £11.5bn in 2026 and £17bn in 2027 versus earlier forecasts.

Explore the full report for the implications for UK growth, consumers and markets.