'Resilient' UK economy grows by 0. 4%
View more on these topicsAdvisersEconomyNewsExperts have branded the UK economy as “more resilient than many expected” following a 0. 4% rise in GDP in the three months to June 2026. This growth was achieved. . .
View more on these topicsAdvisersEconomyNewsExperts have branded the UK economy as “more resilient than many expected” following a 0. 4% rise in GDP in the three months to June 2026. This growth was achieved through a 0. 4% rise in services and was partially offset by falls of 0. 2% in production and 0. 1% in construction. While this growth is applauded, industry commentators have questioned whether GDP will grind to a halt in the second half of the year, following previous trends. Richard Carter, head of fixed interest research at Quilter Cheviot, said: “While still subject to revision, this backs up a first quarter figure of 0. 6%, certainly a long way from a lot of the gloom that came in the immediate aftermath of the conflict in Iran and the wider Middle East erupting. “While the growth is nothing to write home about, it is perhaps reflective of the fact that the economy was in a more robust shape than previously thought, given what the first six months have thrown up so far. “Unfortunately, the UK has been in this position before, with the first half of 2025 delivering a strong level of growth, only for GDP to grind to a half in the second half. It is likely a similar trend may emerge again, even with a new prime minister keen to boost consumer confidence. “As we get closer to October’s Budget, it is vital that the new administration does not repeat the same mistakes as the last one and choke off any growth by allowing speculation of tax rises to run rampant. ”Scottish Friendly savings specialist Kevin Brown agreed that while the UK economy is proving “far more resilient than many would have expected… the real question is how long can that last”. He warned that the longer the conflict in the Middle East drags on, the greater the risk to rising prices, which will “pile pressure on firms and force households to rein in their spending”. Brown added: “The Treasury has modelled that if the conflict continues until the end of the year, it will severely hamper growth next year, suggesting that the resilience the economy has shown so far won’t last forever. “For savers, the sensible move is to ready their finances for prolonged uncertainty. That means building up a cash buffer wherever possible, shopping around for the best savings rates and putting any spare cash to work in the stock market. ”Surprise as ‘resilient’ UK economy grows by 0. 1% in MaySchroders senior economist George Brown suspects “seasonal quirks are flattering activity in the first half of the year, with growth likely to lose some steam later in 2026”. “As momentum fades, we see little reason why the labour market would break out of its current soft equilibrium, limiting the chance that external shocks translate into broader domestic inflation pressures. “That should give the Bank of England confidence inflation risks remain contained for now. However, a more expansionary fiscal stance under the new chancellor could force the bank back into tightening mode towards the end of 2027,” he added. YOU Asset Management CEO Derrick Dunne said: “The most important issue to now watch for is what happens next with inflation. With the economy performing better than expected, this will put a floor under what the Bank of England thinks should be happening to its base rate. “Whether the MPC chooses to hike will come down to crucial readings in the latter half of the year. Anyone unsure what this could mean for their long-term financial plans should consider speaking with a financial planner. ”