UK Economy Shows Unexpected Resilience Ahead of New Budget

The UK economy is showing surprising signs of strength, according to recent data. A business survey showed the services sector recorded its best growth in six months, confounding expectations for a slowdown. Consumer confidence has also hit a two-year high this month.

The Office for National Statistics reported that Britain's economy expanded by 0.3% in June and 0.4% over the second quarter as a whole, led by the services sector. This puts Britain on track for the fastest growth among the Group of Seven advanced economies for the first half of this year.

Economist Thomas Pugh said, 'If we're not careful, we might have to stop talking about resilience and actually start talking about a reasonable economic performance this year.'

The biggest risks to the economy are still inflation and the state of the public finances. Consumer price growth looks almost certain to head past 3% in the coming months, and with no end in sight to the U.S.-Israeli war on Iran it remains to be seen how much further global energy prices can rise.