The UK economy grew by 0.3% in the three months to June, official figures show, beating forecasts of a slowdown to 0.1% despite a weaker performance in April and May. The Office for National Statistics (ONS) said growth slowed from 0.7% in the first quarter, but a stronger-than-expected 0.4% expansion in June helped lift the quarterly figure.
Liz McKeown, ONS director of economic statistics, said: 'Growth slowed in the second quarter after a strong start to the year. The economy was weak across April and May, with some activity having been brought forward to February and March ahead of stamp duty and tariff changes, but then recovered strongly in June.' The ONS revised its estimate for April's contraction from -0.3% to -0.1%.
Services sector growth of 0.4% led the quarterly expansion, driven by computer programming, health and vehicle leasing. Construction output rose 1.2%, supported by large infrastructure projects, while manufacturing grew 0.3%, down from 1.1% in the first quarter when firms rushed to beat US tariffs. Business investment fell by 4% in the quarter.
Chancellor Rachel Reeves said the figures showed Britain had recorded a strong start to the year and continued growth in the second quarter, 'but there is more to do to deliver an economy that works for working people'. However, the economy faces headwinds from global trade tensions and a sluggish domestic outlook, with many economists expecting slower growth in the second half of the year.
The stronger-than-expected data could complicate the Bank of England's path to cutting interest rates further. Last week the Bank cut its base rate to 4%, but warned that continued growth and rising inflationary pressures from food prices could force delays to further cuts. The pound rose slightly against the US dollar following the release.
