Economy growth slows to 0.4% after Iran war disruption - but World Cup and heatwave helps with June bounceback
The UK saw a 0.6% rise in GDP for the first three months of 2026.
Britain’s economic growth slowed in the second quarter but a boost from heatwaves and the World Cup helped offset impacts from the Iran war in a better-than-expected performance in June, official figures have shown.
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The Office for National Statistics (ONS) said gross domestic product (GDP) rose by 0.4% between April and June, down from 0.6% growth in the first three months of the year.
Its data showed growth of 0.3% month-on-month in June, against expectations for a flat performance, as the ONS said firms across the service sector reported buoyant trade thanks to extreme hot weather and the start of the World Cup football tournament.
The June rise in GDP followed flat growth in May, revised down from 0.1% growth previously estimated, and a 0.1% contraction in April.
ONS director of economic statistics Liz McKeown said: "Growth slowed in the second quarter of the year, following a strong start to 2026, but remained relatively robust.
"Services were once again the main driver of growth, while production was broadly unchanged and construction also grew."
It comes after the services sector – the most dominant in the UK economy – strengthened in May, largely coming from professional services and scientific research and development.
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In response to the latest economic growth data, Chancellor of the Exchequer John Healey said: “I know people are worried about the impact of the conflict in the Middle East on their cost of living, which has been too high for too long and it has added pressure on British businesses.
“This is an active, hands-on government, putting British interests first – giving breathing space to those feeling the strain, making our country more resilient and bringing hope back.
“We’ve seen the fastest growth in the G7 this year, but we now need to double down and drive growth in every postcode.”
Recent data has pointed to factories and manufacturing firms stockpiling in anticipation of supply shortages and price rises, which has helped keep growth elevated.
But it comes as treasury officials who briefed the Prime Minister warned the UK economy will barely grow next year if disruption to the Strait of Hormuz linked to the Iran war continues until the end of 2026.
On Wednesday, modelling shown to the Prime Minister and Chancellor said the UK economy could grow by 0.9% this year if there is no permanent peace deal between the US-Israeli forces and Iran.
This would miss the 1.1% prediction from the Office for Budget Responsibility (OBR) earlier this year.
The OBR had also predicted 1.6% GDP growth in 2027.
The more extreme scenario also indicated that Consumer Price Index (CPI) inflation could peak at 4.3% in the first quarter of next year, with disruption in the Strait of Hormuz likely to keep oil and gas prices elevated.
This is a breaking story. More to follow.