UK Economy Beats Forecasts with 1.2% Q2 Growth

The UK's economy showed resilience in Q2 2026, growing at an annual rate of 1.2%, surpassing market forecasts of 1.1%. This steady expansion is driven by robust consumer spending and a resilient services sector.

The services sector, which accounts for about 80% of the UK's economic output, contributed significantly to growth, with professional services, hospitality, and information technology showing particular strength.

Manufacturing output also showed resilience, expanding by 0.8% on the year, while construction remained flat.

The better-than-expected GDP figure may influence the Bank of England's monetary policy trajectory, with policymakers likely to maintain a cautious approach to interest rate cuts as growth holds up and inflation hovers near the 2% target.