11 September 2026
If you are covering the latest UK GDP figures from the Office for National Statistics, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Having bathed in sunshine for the vast majority of the month, and England experiencing a run to the World Cup semi-finals, the UK economy bucked expectations with solid growth of 0.4% for July. Growth was experienced in all three sectors, with services continuing to do much of the heavy lifting, although this masks a somewhat more concerning three-month picture for production and construction.
“The concern was that the UK was likely to experience another year when the economy runs out of steam when it comes to growth. After a better than expected first half last year, the economy spluttered to a halt in the latter half. But tentative signals are that things may be different his time around, despite the geopolitical situation showing no sign of abating. Growth is going to be hard to come by so this may not last, especially as activity is likely to stall ahead of the Budget. Indeed, there appears little consistency in the growth experienced by the UK right now, with today’s decent rise coming off the back of a contraction in April (-0.1%), no growth in May (0.0%) and a modest return to growth in June (0.3%).
“Market eyes are now focusing closely on the looming Budget at the end of October. Chancellor John Healey looked to assure markets that current borrowing concerns are being listened to and that the new government understands the fiscal position the UK finds itself in. With the energy price cap surging by 13% in July and oil prices continuing to climb higher, inflation concerns are once again being sparked. With the Bank of England poised to raise rates at least once this year, and business and consumer confidence already subdued, the growth conundrum is going to linger for the foreseeable future despite today’s positivity.
“This is clearly not just a UK-centric problem, with Europe experiencing conditions akin to stagflation and the US economy having its growth checked at the same time. The war in the Middle East continues to drive a lot of the economic data, but the UK is the most exposed to the fallout. Calls for pro-growth measures will get louder as the Budget nears, but whether or not the government has the room to act remains to be seen, especially if more tax levers are likely to be pulled.”
