UK Growth Defies Global Drag

Can the UK keep leading the G7 when global headwinds gather? The UK's economy managed 0.3% growth between April and June, outpacing economists' predictions of just 0.1%—but it's a marked slowdown from the 0.7% expansion in the first quarter. As the ONS data makes clear, this surprise resilience came from strong services (+0.4%) and a 1.2% jump in construction, partially offset by a 0.3% contraction in production. The surge in scientific research (+8.3% in June), and architecture/engineering (+6.7%), lent a further unexpected boost.

But most of this quarter’s strength is built on sand: April’s energy and housing market rush faded, business investment fell sharply, and much of the Q2 rebound relied on increased public spending and repairs, not robust private sector confidence. Downside risk? A yawning £20bn–£40bn fiscal gap is looming for the Autumn Budget, forcing tough choices on taxes, spending, or both. Political leaders tout positives, but even supporters admit “more work to do”—and critics warn the good news might not last if wage gains don't translate to stronger demand.