UK Economy Remains Resilient Despite Iran War and Higher Energy Prices
Porsche to Phase Out Taycan by 2030 Amid Weak EV Demand CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and… The UK economy grew 0.4 per cent between April and June, official data has revealed, in a sign that businesses and consumers have so far weathered the worst shocks of the war in Iran.
The growth figure from the Office for National Statistics was in line with analysts’ expectations but came alongside a surprise boost of 0.3 per cent in June, ahead of forecasts.
Figures for May were revised down from 0.1 per cent growth to no growth.
City economists polled by Bloomberg hadpredictedthat growth in the second quarter would be 0.4 per cent while data for June would show a decline in total product value of 0.1 per cent.
The services sector lifted the UK economy in the three-month period, growing by 0.5 per cent.
Production was flat with no change from the first quarter while the construction sector struggled to build momentum with an expansion of 0.3 per cent.
The figures suggest that businesses and consumers have been resilient in the face of price shocks brought on by the war in Iran, which has pushed up oil prices and threatens to fuel inflation later this year.
However, analysts warned the economy had enjoyed a boost from one-off events like the World Cup and a series of heatwaves.
Schroders senior economist George Brown recognised that the UK economy had proven to be “resilient” but he added that he suspected “seasonal quirks are flattering activity in the first half of the year, with growth likely to lose some steam later in 2026”.
Yael?Selfin, chief economist at KPMG, said “temporary tailwinds are likely to fade, and higher prices continue to squeeze households’ purchasing power”.
“Growth is expected to moderate in the coming months as the impact of higher prices and borrowing costs filter through to households and businesses,” Selfin said.
The growth figures showed that consumers had enjoyed high temperatures and so far dealt with recent economic shocks “remarkably well”, she added.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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