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AzerNEWS Staff

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The UK economy is expected to have recorded another quarter of growth despite supply chain disruption, rising price pressures and wider uncertainty linked to the war in Iran, although economists warn that some sectors are increasingly coming under strain.

Data from the Office for National Statistics due on Thursday is expected to show that gross domestic product (GDP) rose by around 0.4% in the second quarter, covering April to June.

Such an increase would extend the UK’s growth streak after GDP expanded by 0.6% in the first quarter of 2026.

Rob Wood, chief UK economist at Pantheon Macroeconomics, said the figures would demonstrate the resilience of the economy in the face of the shock caused by the conflict in Iran.

“The big picture is that the economy has remained resilient to the hit from the war in Iran,” he said.

The services sector, which accounts for the largest share of the UK economy, strengthened in May, supported largely by professional services and scientific research and development.

Manufacturers and factories have also been building up stocks in anticipation of potential supply shortages and higher prices, helping to sustain economic activity.

However, economists expect the picture to have weakened in June as extreme heat produced mixed effects across the economy and pressure increased on several industries.

Wood forecasts monthly GDP to have fallen by 0.1% in June, reversing May’s 0.1% increase.

He expects a sharp decline in construction activity to have weighed on growth, while services and industrial production remained broadly stagnant.

Thomas Pugh, chief economist at RSM UK, also expects the services sector to have weakened, particularly as hospitality activity declined.

Pugh said business surveys suggested consumers may have shifted spending from restaurants to pubs to watch the Fifa World Cup rather than increasing their overall spending.

He nevertheless expects economic activity to receive a boost in July from exceptionally warm weather and England’s run to the semi-finals.

Pugh has forecast a 0.1% rise in monthly GDP for June, helped by a sharp increase in volatile mining activity.

Taken together, he expects this to be sufficient to produce 0.4% quarterly growth, supported by strong momentum from the first quarter and consumers continuing to absorb higher inflation.

The expected growth figures would provide a positive backdrop for Prime Minister Andy Burnham, who has made economic expansion a central priority and pledged to deliver “growth in every postcode” across the UK.

Burnham opened a new central government headquarters in Manchester in late July, known as No 10 North, as part of his plans to shift more political and administrative power away from Westminster.

The government is expected to focus closely on the latest growth figures as it seeks to maintain economic momentum while businesses contend with the continuing effects of geopolitical tensions, elevated costs and pressure on consumer spending.