UK economy grows more than expected in second quarter
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Britain’s economy exceeded expectations in the second quarter, but growth slowed from the first three months of 2025 on US tariffs and a higher UK business tax, official data showed Thursday.
Gross domestic product stood at 0.3 percent in the April-June period, the Office for National Statistics (ONS) said in a statement — beating analyst forecasts of 0.1 percent growth after reaching 0.7 percent in the first quarter.
“Today’s economic figures are positive with a strong start to the year and continued growth in the second quarter,” said finance minister Rachel Reeves.
“But there is more to do to deliver an economy that works for working people,” she added in a separate statement, following a difficult first year in power for the Labour government as the economy struggles to grow significantly.
ONS data showed that growth to construction and services in the second quarter helped to offset a drop in production.
“Growth was led by services, with computer programming, health and vehicle leasing growing,” noted Liz McKeown, ONS director of economic statistics.
Official data Wednesday showed UK unemployment at a four-year high of 4.7 percent in the second quarter.
This is largely down to Prime Minister Keir Starmer’s government increasing a UK business tax from April, the same month that the country became subject to US President Donald Trump’s 10-percent baseline tariff on most goods.
Citing threats to growth from US tariffs, the Bank of England last week cut its key interest rate by a quarter point to four percent.
“The weak global economy will remain a drag on UK GDP growth for a while yet,” Ruth Gregory, deputy chief UK economist at Capital Economics research group, said following Thursday’s data.
“The full drag on business investment from April’s tax rises has yet to be felt. And the ongoing speculation about further tax rises in the (UK) autumn budget will probably keep consumers in a cautious mood.”
AFP
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