UK GDP Growth Beats Expectations in February

The UK economy grew 0.3% month-on-month in June 2026, compared with zero growth in May and expectations for no change. The economy was helped by the temporary decline in energy costs, along with hot weather and World Cup football. Services output remained the sole driver of overall growth, rising 0.4%, with the largest positive contribution coming from professional, scientific and technical activities (1%), particularly scientific research and development, which rose to its highest level since January 2025, as well as legal activities. Administrative and support service activities (1.8%) and information and communication (0.9%) also contributed positively to GDP growth. This more than offset declines in production (-0.2%) and construction (-0.1%). Yearly, GDP rose 1.1%, slowing slightly from a revised 1.2% increase in May but exceeding forecasts of a 0.8% growth. GDP increased 0.4% in the three months to June, matching expectations, after a revised 0.6% rise in the previous period.

The UK economy expanded by 0.1% month-on-month in May 2026, in line with market expectations and rebounding from a 0.1% contraction in April. Growth was driven solely by a 0.3% increase in services output, with professional, scientific and technical activities providing the largest positive contribution, supported by strength in scientific research and development and advertising services. Administrative and support services and health activities also advanced. These offset a 0.5% decline in production and a 0.8% fall in construction. In the three months to May, GDP grew 0.7%, marking a sixth consecutive three-month expansion, led by services, which rose 0.7%, while construction increased 1.6% and production edged up 0.1%. Compared with a year earlier, the GDP expanded 1.3%, below forecasts of 1.4% but marking the steepest growth since July 2025, and accelerating from a downwardly revised 1.1% increase in April.

The GDP in the UK contracted by 0.1% month-on-month in April 2026, in line with expectations and following a 0.3% expansion in March. This marked the first contraction since August last year, as the effects of the Middle East conflict began to ripple through the economy. Services output declined 0.2%, with the largest negative contributors being administrative and support service activities, which fell 2.2%, and arts, entertainment and recreation (-4.3%). Wholesale and retail trade, including motor vehicle repair, also declined 0.4%. On the other hand, information and communication provided the largest positive contribution, rising 1.1%. Meanwhile, production output was flat after a 0.2% decline in March, as gains in manufacturing and mining were offset by declines in utilities and water-related activities. In contrast, construction grew by 0.1%. On a yearly basis, GDP expanded 1.2%, the same pace as in March and slightly below a forecast of 1.3%.