The UK economy grew by 0.4% in the second quarter of 2026, slowing from 0.6% in the first three months of the year but recording increases in services, construction, household spending and business investment.
The Office for National Statistics said real gross domestic product was 1.2% higher than a year earlier. Real GDP adjusts for price changes, making it a measure of changes in the amount of goods and services produced rather than inflation.
GDP per head also increased by 0.4% during the quarter and was 1.0% higher than a year earlier. This measure divides economic output by the population, so the increase shows that growth was not solely the result of a larger population.
Monthly GDP grew by 0.3% in June after no growth in May, which was revised down from an earlier estimate of 0.1%.
Services produced most of the growth
Services output increased by 0.5% and supplied the largest contribution to quarterly growth. Construction rose by 0.3%, while production was unchanged.
Fifteen of the 20 main economic subsectors expanded. Information and communication output rose by 2.7%, led by a 3.7% increase in computer programming, consultancy and related activities.
Professional, scientific and technical activities grew by 1.7%. Advertising and market research rose by 4.3%, scientific research and development by 3.9% and legal activities by 2.5%.
Manufacturing increased by 1.0% within an otherwise flat production sector. Construction remained 2.0% lower than a year earlier despite its quarterly increase.
Investment rose faster than household spending
Household consumption grew by 0.3%, with recreation, culture and household goods among the main contributors. Government consumption fell by 0.3%, reflecting lower measured output in health and education.
Gross fixed capital formation increased by 1.2%. This is spending on assets such as buildings, machinery, equipment and software that can be used for more than one year.
Within that total, business investment rose by 1.7% during the quarter and by 0.8% from a year earlier. The ONS linked the quarterly increase partly to spending on information and communication technology, machinery and computer hardware.
The investment figures are an early estimate and may be revised. Even so, they provide a more useful indication of future productive capacity than the headline GDP number alone. New equipment and technology can raise output later, while one quarter of stronger spending does not establish a lasting investment trend.
Services also carried the trade figures
Export volumes increased by 0.5% in the second quarter. Services exports rose by 0.8%, while goods exports increased by just 0.1%.
That quarterly split helps explain how economic growth continued despite June’s sharp deterioration in goods trade. As we reported in our analysis of the June trade figures, goods exports fell by 6.3% in value during the month, while the services surplus offset about 87% of the quarterly goods deficit.
The two sets of figures measure different things. The 6.3% decline is a monthly change in the current cash value of goods exports. The 0.1% increase is a quarterly change in goods export volumes after price movements are removed.
The wider outlook remains restrained. The Bank of England’s July forecast expects spare capacity in the economy, meaning labour and productive resources that are available but not fully used, to increase slightly during the rest of 2026. It expects growth to strengthen from the second half of 2027 as pressure from higher energy prices and weaker household purchasing power fades.
The second-quarter estimate will be revised as more information becomes available. The ONS is due to publish the quarterly national accounts on 30 September.
