UK economy grows 0.5% in second quarter as ONS revises GDP figures upward

Britain’s economy grew faster than initially thought in the second quarter of 2026, the Office for National Statistics said on Wednesday, revising GDP growth up to 0.5% from a first estimate of 0.4%, beating economist forecasts of no revision (https://www.reuters.com/world/uk/uk-economy-grew-by-05-q2-2026-ons-says-2026-09-30/).

Services drove the upgrade: the sector generates about 80% of GDP: services output grew 0.6% in the quarter, with June boosted by hot weather and the World Cup football tournament (https://www.thetimes.com/business/economics/article/uk-economic-growth-revised-upwards-second-quarter-v50cxnfmm, https://www.theoldhamtimes.co.uk/news/national/26593064.uk-economy-grows-faster-first-thought-amid-service-sector-boost/).

The revision cemented Britain as the fastest-growing G7 economy in the first half of 2026 (https://www.reuters.com/world/uk/uk-economy-grew-by-05-q2-2026-ons-says-2026-09-30/).

Household finances also improved. Real household disposable income per head rose 1.0% in the quarter — the biggest increase since the end of 2024 — after a 0.8% fall in the first quarter (https://www.reuters.com/world/uk/uk-economy-grew-by-05-q2-2026-ons-says-2026-09-30/, https://www.thetimes.com/business/economics/article/uk-economic-growth-revised-upwards-second-quarter-v50cxnfmm).

Business investment was revised sharply higher to an annual rate of 5.2% in Q2, from an initial 0.8% (https://www.reuters.com/world/uk/uk-economy-grew-by-05-q2-2026-ons-says-2026-09-30/).

Britain’s current account deficit narrowed to £19.9bn, below the £24.7bn consensus — closing to 1.4% of GDP excluding precious metals, the smallest in five years, helped by services exports (https://www.reuters.com/world/uk/uk-economy-grew-by-05-q2-2026-ons-says-2026-09-30/).

“Stronger services growth in the latest quarter means the economy is now slightly larger than previously estimated,” said Liz McKeown, the ONS’s director of economic statistics (https://www.thetimes.com/business/economics/article/uk-economic-growth-revised-upwards-second-quarter-v50cxnfmm).

It could cheer Chancellor John Healey ahead of October’s budget. The OECD last week raised its UK 2026 growth forecast to 1.1% from 0.9%, while WPI Strategy economist Martin Beck said the revisions strengthened “the evidence that the economy proved more resilient than expected … despite the fallout from the Iran war” (https://www.thetimes.com/business/economics/article/uk-economic-growth-revised-upwards-second-quarter-v50cxnfmm).

Sources

• Reuters: https://www.reuters.com/world/uk/uk-economy-grew-by-05-q2-2026-ons-says-2026-09-30/ (reporting by Suban Abdulla and Andy Bruce; edited by Kate Holton)
• The Times: https://www.thetimes.com/business/economics/article/uk-economic-growth-revised-upwards-second-quarter-v50cxnfmm
• Firstpost: https://www.firstpost.com/business/uk-economy-grows-0-5-per-cent-in-q2-as-output-household-finances-strengthen-14049363.html
• PA via The Oldham Times: https://www.theoldhamtimes.co.uk/news/national/26593064.uk-economy-grows-faster-first-thought-amid-service-sector-boost/