UK financial progress slowed as US President Donald Trump’s tariffs hit and companies grappled with increased prices, official figures present.
A measure of every part produced within the financial system, gross home product (GDP), expanded simply 0.3% within the three months to June, in accordance with the Workplace for Nationwide Statistics (ONS).
It is a slowdown from the primary three months of the yr when companies rushed to arrange for Mr Trump’s taxes on imports, and GDP rose 0.7%.
But it surely’s additionally a stronger exhibiting than anticipated and comparatively welcome information for Chancellor Rachel Reeves, whose authorities has staked its success on rising the financial system.
Economists polled by Reuters and the Financial institution of England had solely anticipated GDP enlargement of 0.1% throughout April to June.
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The determine was higher than anticipated after a powerful June. Throughout the month, GDP rose 0.4%, shocking observers.
It may imply the UK has the strongest-performing financial system of the G7 membership of rich nations for the primary half of 2025, a title it held within the first three months of the yr. Member state Japan has but to report its GDP information.
What occurred?
Warning from clients and better prices for employers, nevertheless, led to the decrease progress studying as much as June moderately than the earlier quarter.
Employers had been hit with increased prices within the type of costlier nationwide insurance coverage contributions and elevated minimal wages.
Financial exercise in April and Might, specifically, was weak as purchases had been introduced ahead to early within the yr forward of the stamp obligation change and tariff adjustments.
Prices rose for households in April as power, water and council tax payments rose, resulting in increased inflation total.
Progress got here from companies, the most important sector of the financial system, with laptop programming, well being and automobile leasing performing properly, the ONS’s director of financial statistics, Liz McKeown, mentioned.
Scientific analysis and improvement, engineering and automobile gross sales all had a powerful month in June, as did manufacturing of electronics, she added.
One other approach of measuring issues
When checked out on a per-person foundation – which strips out the financial advantages from a bigger inhabitants – GDP grew 0.7% over the previous yr.
This metric, often called GDP per capita, higher tracks residing requirements.
Dwelling-standards thinktank, the Decision Basis, identified that is weaker than the 2010s common of 1.3%, and a “far cry” from the two.5% progress within the pre-financial disaster interval from 1993 to 2008.
Political response
Ms Reeves described the figures as “optimistic with a powerful begin to the yr and continued progress within the second quarter”.
“However there’s extra to do to ship an financial system that works for working individuals,” she added.
“I do know that the British financial system has the important thing components for fulfillment however has felt caught for too lengthy.
“That’s the reason we’re investing to rebuild our nationwide infrastructure, chopping again on crimson tape to get Britain constructing once more and boosting the nationwide minimal wage to make work pay. There’s extra to do”.
