UK Economy Shrugs Off Energy Price Surge with Robust Q2 Growth

The UK economy showed resilience this week, growing by 0.4% in the second quarter, slightly above expectations.

This growth was largely driven by businesses adapting to rising energy prices, particularly in industries such as restaurants and television production that benefited from World Cup activity.

Rising inflation is a concern, however, with the Bank of England predicting it will reach 3.2% by the end of the year, reducing households' real incomes.

The Strait of Hormuz disruption continues to pose a threat, with internal Treasury scenarios suggesting growth in 2027 could be dragged down to just 0.3% if the situation persists until then.