UK GDP bounced in June, helped by Gulf ceasefire, World Cup and sunshine

Britain's economy unexpectedly grew in June, according to official data released on Thursday, despite challenges in the energy sector caused by the Iran war. The Office for National Statistics (ONS) reported that the Gross Domestic Product (GDP) increased by 0.3% from May, which had been previously revised to show no growth. Economists surveyed by Reuters had anticipated zero growth in June.

The ONS cited a decline in the number of firms mentioning the Iran conflict compared to previous months, linked to a ceasefire in the conflict. Additionally, some businesses attributed their success in June to favorable weather conditions and participation in sports events like the men's soccer World Cup.

The growth in June was primarily driven by a 0.4% rise in services, partially offset by declines of 0.2% in industrial production and 0.1% in construction. For the second quarter, which spans the three months up to the end of June, the economy expanded by 0.4%, marking a slowdown from a 0.6% increase in the first three months of the year. However, this growth rate was deemed stronger than usual.

The second quarter took place during a politically uncertain period in Britain, marked by uncertainty over the control of power by Keir Starmer, who eventually stepped down as prime minister in July. Despite this strong performance in the first half of 2026, projections suggest that Britain's economy may decelerate in the months ahead.

The new Prime Minister, Andy Burnham, has pledged to address the cost of living crisis and reduce costs for businesses amid a difficult financial outlook. Finance Minister John Healey highlighted that the UK has experienced the fastest growth among the Group of Seven (G7) countries this year, but emphasized the need to expand growth across all regions of the country.