UK GDP Growth Slows in Q2 as Pound Falters Against Dollar

The UK's economic growth rate has slowed down in Q2 of this year. According to data from the Office for National Statistics, the Gross Domestic Product (GDP) growth rate decelerated from 0.6% in Q1 to 0.4% in Q2 2026, meeting analysts' expectations.

The breakdown shows that gross fixed capital formation increased by 1.2%, while household consumption advanced by 0.3%. On the other hand, government consumption contracted by 0.3%. When looking at annual growth rates, the GDP eased from 1.2% to 1.1%.

The British pound fell marginally by 0.05% against the US dollar, trading near $1.3486 after the release of the data. Despite the slight deceleration, the UK economy continues to show resilience due to sustained economic expansion, easing inflation at 2.6% in June, and a declining unemployment rate.

Market expectations suggest that the Bank of England may keep interest rates steady at 3.75%, with some analysts predicting a final hike towards the end of this year. The ongoing US-Iran conflict is also being closely monitored, as it poses a risk to energy supply disruptions and global inflationary pressures.