UK Q2 2026 Preliminary GDP Rises 0.4% QoQ, Matching Expectations
Key Takeaways
- •The UK economy expanded by 0.4% in Q2 2026 quarter-on-quarter, matching market expectations but slowing from the downwardly revised 0.6% growth recorded in Q1.
- •On a year-on-year basis, UK GDP was 1.2% higher in the second quarter of 2026 compared to the same period a year earlier.
- •The services sector, which represents approximately four-fifths of UK economic output, grew 0.5% and was the primary driver of quarterly growth, while construction rose 0.3% and production output was flat.
- •The Bank of England's policy outlook is not expected to change materially, as the in-line expansion provides little impetus to alter the pace of rate cuts.
- •As the first of three quarterly estimates published by the ONS, the preliminary GDP figure remains subject to revision as more complete data becomes available.
UK Q2 2026 Preliminary GDP Rises 0.4% QoQ, Matching Expectations
The UK Office for National Statistics (ONS) released preliminary GDP data on 13 August 2026, showing that the British economy expanded by 0.4% in the second quarter of 2026, in line with market expectations of +0.4% quarter-on-quarter. This marks a moderation from the downwardly revised first-quarter reading of +0.6%. As the first of three quarterly estimates the ONS will publish, the preliminary figure is subject to revision as more complete source data becomes available.
Compared to the same quarter a year earlier, UK GDP was estimated to be 1.2% higher in Q2 2026.
Sector Breakdown
Growth in the latest quarter was primarily driven by the services sector, which posted an increase of 0.5%. The construction sector also contributed, rising by 0.3%, while production output registered no growth during the period. Services account for roughly four-fifths of UK economic output, meaning the sector's performance largely determines the direction of headline GDP.
Services output in Q2 rose by 0.5%, following a stronger 0.8% increase in Q1. This easing in services activity largely accounts for the slower overall growth relative to the first quarter. On a year-on-year basis, however, services output was estimated to be 1.5% higher.
BOE Outlook Unchanged
Despite the deceleration from Q1, the overall picture remains a solid performance. The data is not expected to materially alter the Bank of England's (BOE) policy outlook. The BOE, which began easing its Bank Rate from a peak of 5.25% in 2024, has been weighing the balance between still-elevated services inflation and moderating overall growth. A quarterly expansion in line with expectations provides little new impetus for either accelerating or slowing the pace of rate cuts.
The ONS also released the June monthly GDP report simultaneously.
Source: ONS, 13 August 2026. Original article via ForexLive/InvestingLive
