- The UK economy grew by 0.3% in June and 0.4% in the second quarter of the year
- Start of the World Cup boosted food and drink manufacturers and service, as well as the advertising sector
- Real household consumption rose 0.3% in the three months to June
Danni Hewson, AJ Bell head of financial analysis, comments on the latest GDP figures:
“June might well prove to be the last real sweet spot for the UK economy this year. The start of the World Cup had food and drinks makers rushing to stock up supermarket shelves and fill pub cellars ahead of a summer of excitement and revelry that didn’t quite end in triumph – but did boost sentiment.
“There was a rush to get football themed adverts to air as businesses recognised the opportunity to engage with receptive consumers. Many people were happy to splurge a little as the warm weather gave households opportunities to celebrate with friends and family.
“Whilst growth over the second quarter of the year didn’t quite live up to that enjoyed in the first three months, it is still notable as it covers a period when tension was waxing and waning in the Middle East and the oil price was volatile. Businesses have become acutely sensitive to the fluctuations of the Iran war, watching every ebb and flow in the price of oil and every tanker moving through the Strait of Hormuz, and June delivered a small respite as hopes of a lasting ceasefire mounted.
“The UK economy has fallen into a pattern over recent years, with growth front loaded to the start of the year but petering out in later months despite the historically significant ‘golden quarter’ for retailers and hospitality businesses in the lead up to Christmas. Speculation about the potential impacts of Budget measures has undoubtedly impacted the decision making of many firms choosing to press pause on activity until they have more certainty.
“That will be at the forefront of the minds of many in the Treasury. Any additional nerves will only add to the uncertainty being created by the situation in the Middle East, which could seriously curtail growth into next year.
“There have been questions asked about the ONS seasonal modelling, and the data must be looked at in the round. With events like the Jaguar Land Rover cyber-attack in the autumn of 2025 and last year’s late Budget, it’s easy to track some of the ways the economy has been held back.
“There have been signs of green shoots and plenty of talk of a ‘Burnham Bounce.’ But although the global economy has held up remarkably well so far despite the surge in the oil price, the real test will come if the winter is harsh and energy demand meets supply shortages.”
