United Kingdom: Softer second-half growth expected – Societe Generale
Societe Generale’s Sam Cartwright notes United Kingdom (UK) Gross Domestic Product (GDP) rose 0.4% qoq in 2Q26, driven mainly by business investment and resilient consumer spending.
Societe Generale analyst Sam Cartwright forecasts softer UK GDP growth of 0.1% quarter-on-quarter in the second half of 2026, following a 0.4% rise in the second quarter of 2026. The growth was primarily fueled by business investment, particularly in ICT equipment, which has been a consistent driver since the fourth quarter of 2024.
However, Cartwright anticipates this momentum to wane as temporary boosts fade and energy-related challenges intensify. He believes the second half of 2026 will likely see a 0.1% qoq GDP growth, reflecting the typical pattern of stronger growth in the first half of the year followed by softer growth in the second half. Factors such as the unresolved US-Iran conflict, potential Autumn Budget tax rises, restrictive monetary policy, and rising utility prices could contribute to this trend.
Despite these concerns, Cartwright maintains that UK economic activity remains robust, even in the face of ongoing geopolitical tensions. The recent GBP/USD pair witnessed a notable surge, reaching fresh three-month highs near 1.3560, driven by a weakening US Dollar amid concerns over the Middle East conflict.
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