UK economic growth slows between April and June

The UK economy saw modest growth between April and June, expanding by 0.4%, according to official figures from the Office for National Statistics (ONS). While this figure met market expectations, it was lower than the 0.6% increase recorded in the first quarter of the year. The ONS reported that the UK's economic growth remained relatively robust compared to other G7 nations this year thus far.

However, some economists expressed concerns that this resilience might not be sustained, citing factors such as the ongoing Iran war and political uncertainty surrounding Prime Minister Keir Starmer's leadership.

Sectors like computer programming, advertising, and the pharmaceutical industry contributed to the growth, while others, including power generation and sewerage, experienced declines. Some businesses attributed their improved performance to favorable weather conditions and sports events during June, which boosted month-on-month growth to 0.3%.

The start of the men's football World Cup mid-June also helped increase business at venues hosting matches. Notably, May's growth figure was revised downward from 0.1% to zero growth.

Fergus Jimenez-England, an associate economist from the National Institute of Economic and Social Research, noted that the UK economy had weathered the recent energy shock better than anticipated. Matt Harwood, director of Clarity Plastics, mentioned that while the conflict had initially led to cost inflation for raw materials, prices have since stabilized.

Despite these positive developments, Jimenez-England cautioned that sustained growth is unlikely, as inflation and unemployment are expected to rise, and business sentiment remains fragile due to ongoing energy price volatility.

The UK economy is currently 1.2% larger than it was a year ago. However, experts warned that the recovery may be short-lived, with both inflation and unemployment likely to increase. The uncertainty surrounding the Iran war and the potential impact on energy prices may further dampen growth prospects. In response to the latest figures, Chancellor John Healey acknowledged public concerns about the conflict's impact on living costs and pledged to make the UK more resilient while driving growth in every region.

Shadow Chancellor Sir Mel Stride criticized the previous government's tax and borrowing policies, suggesting they have weakened the economy and made it vulnerable to external shocks.