UK economy beats forecasts in June on World Cup, weather and Iran ceasefire
UK GDP grew 0.3% in June, beating forecasts, helped by the World Cup, hot weather, and a brief Iran ceasefire.
Britain's economy expanded by 0.3% in June from May, according to official data released on Thursday, defying expectations of flat growth. The uptick was supported by a temporary lull in the Iran conflict, the start of the men's football World Cup, and a spell of hot weather.
The services sector led the gains, rising 0.4% during the month. This was partially offset by declines of 0.2% in industrial production and 0.1% in construction. The Office for National Statistics noted that fewer businesses cited the Iran war as a factor compared with recent months, coinciding with a ceasefire that has since lapsed. It also reported that drinks producers, food firms, television production, and advertising saw a boost from the World Cup, while retailers and some manufacturers benefited from the warm weather.
For the second quarter as a whole, the economy grew by 0.4%, slowing from 0.6% in the first three months of the year but matching economist forecasts. The figures put the UK on track for the strongest growth among G7 nations in the first half of 2026.
Economists cautioned that the pace is unlikely to hold. Thomas Pugh, chief economist at RSM UK, said the economy had weathered the Iran war well, but added that growth is likely to slow. Andrew Hunter of Moody's Analytics noted the recent pattern of strong first-half growth followed by a sharp slowdown in the second half of the year.
The Bank of England, which has kept interest rates on hold despite higher energy prices, had forecast 0.3% growth for the second quarter but expects underlying growth to slow to zero between July and September.
The data covers a period of political instability that ended with Keir Starmer's resignation as prime minister in July. His successor, Andy Burnham, has pledged to lower costs for businesses and address the cost of living for households. Analysts also point to the possible revival of the Iran war and speculation over tax changes in finance minister John Healey's first budget on October 28 as potential headwinds.