The UK financial system defied US tariff pressures within the second quarter, increasing by 0.3% and outpacing most G7 friends regardless of a slowdown from the optimistic 0.7% progress seen earlier within the yr. Sturdy performances within the providers and building sector helped drive the positive aspects, offsetting a drop in manufacturing and different manufacturing sectors.
In contrast with the identical interval final yr, the financial system expanded by 1.2%. Whereas hardly spectacular, the efficiency has been sufficient to reassure policymakers and buyers that the UK stays on a comparatively steady path in a unstable world atmosphere.
Beneath the headline numbers, the image was combined. Companies output rose by 0.4%, led by info and communication, well being, and social work. Wholesale and retail commerce, nonetheless, didn’t hold tempo.
Construction delivered the standout efficiency, climbing 1.2% due to robust infrastructure initiatives and personal housing exercise. In distinction, the manufacturing sector slipped by 0.3%, pulled decrease by steep drops in electrical energy, gasoline and steam provide, in addition to mining and quarrying. That mentioned, manufacturing posted a slight 0.3% acquire, buoyed by a 7.0% leap in pharmaceuticals and three.0% progress in equipment and gear.
Associated
A notable 0.4% uptick in month-to-month GDP for June—spanning providers, manufacturing, and building—helped counterbalance weak exercise in April and Could, pointing to a June-led restoration.
Commerce dynamics painted a combined image. Export volumes rose by 1.6% year-on-year, largely attributable to stronger providers exports, regardless of a 0.2% drop in items exports. Import volumes rose 1.4%, pushed by an increase in items imports, whereas providers imports slipped barely.
The narrative underpinning the information included a pre-emptive financial pull-forward into February and March—corporations front-loaded exercise forward of stamp responsibility changes and US tariff announcements. This phenomenon helped inflate Q1 figures and weighed on output within the early a part of Q2, just for a rebound to floor in June.
When positioned alongside world friends, the UK’s efficiency in 2025 up to now appears comparatively robust. In Q2 2025, the UK’s 0.3% progress price matched or exceeded that of different G7 nations. France additionally grew 0.3%, whereas Canada was flat, and Germany and Italy contracted by 0.1% every.
Though america outpaced with 0.7% progress, the UK leads the G7 on a half-year foundation. Combining Q1 and Q2 yields an annualised price of two.2%, the quickest within the group.
