13 August 2026
If you are covering the latest quarterly GDP figures from the Office for National Statistics, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“The UK economy showed a fair amount of resilience in the second quarter of the year, with growth coming in at 0.4%. While still subject to revision, this backs up a first quarter figure of 0.6%, certainly a long way from a lot of the gloom that came in the immediate aftermath of the conflict in Iran and the wider Middle East erupting. Services continue to do the bulk of the work for the economy, with production and construction both suffering falls in June. While the growth is nothing to write home about, it is perhaps reflective of the fact that the economy was in a more robust shape than thought given what the first six months have thrown up so far.
“Unfortunately, the UK has been in this position before, with the first half of 2025 delivering a strong level of growth, only for GDP to grind to a halt in the second half. It is likely a similar trend may emerge again, even with a new prime minister keen to boost consumer confidence. Businesses have been stockpiling following the disruption to supply chains from the US-Iran conflict. With energy prices having moderated and talks of a fresh ceasefire gaining momentum, such activity is unlikely to be repeated. There have also been a number of one-off events helping to contribute, like the World Cup, and the effects of recent heatwaves.
“Furthermore, as we go get closer to October’s Budget, it is vital that the new administration does not repeat the same mistakes as the last one and choke off any growth by allowing speculation of tax rises to run rampant. The last two Budgets have seen consumers and businesses hold off on decisions and spending, preferring to wait until due to the uncertainty created, so clear messaging and a more coherent narrative from Andy Burnham and John Healey should ultimately be beneficial for growth.
“Nevertheless, the government needs to find ways to unlock more growth opportunities for the economy. Burnham likes to talk about delivering ‘good growth’, which is ultimately a very admirable aim, but for an economy that has languished in recent years it first needs to find consistent momentum, not one or two good quarters a year. With the Bank of England very unlikely to cut rates soon, fiscal policy will have to do a lot of the heavy lifting.”
