UK second-quarter GDP growth revised up to 0.5% as services strengthen

The Office for National Statistics said on 30 September that the UK economy grew by 0.5% in April to June 2026, revising its earlier estimate of 0.4% growth. The change gives a stronger reading for the second quarter, though the ONS also revised down its estimate for growth in 2025. Separately, the Bank of England warned that risks to financial stability had increased, while saying the financial system had remained resilient.

The revised second-quarter figure follows an unrevised 0.6% rise in January to March. The ONS now estimates that GDP in the second quarter was 2.0% above its level in the final quarter of 2024, compared with an initial estimate of 1.9%. It said the cumulative increase over that period was largely unchanged, a qualification to the headline upward revision.

What changed in the UK GDP figures

The ONS's revised national accounts incorporate additional data and methodological changes linked to Blue Book 2026, its annual update to the national accounts. Those include new Value Added Tax turnover data for the first quarter of 2026. The agency also reviewed how it balanced three ways of measuring GDP for the second half of 2025. Such changes can alter the historical picture as well as the latest quarterly result.

The revised figures put growth for 2025 as a whole at 1.2%, down by 0.1 percentage points from the previous estimate. The combination of a lower annual figure for last year and stronger recent services growth leaves the latest estimate of the economy's size slightly higher than previously calculated. These figures describe measured output; the second-quarter revision alone does not show whether growth will keep its recent pace.

Services and trade behind second-quarter growth

On the output measure, services grew by 0.6% in the second quarter, revised up from an earlier estimate of 0.5%. Construction grew by 0.8%, while production fell by 0.1%. Output rose in 13 of the 20 GDP subsectors. The largest positive contributions to services growth came from professional, scientific and technical activities, up 2.3%, and information and communication, up 2.5%.

The sector figures were mixed. Education output fell by 0.4%, which the ONS attributed to school closures during June's heatwave conditions. Within services, business-facing activity grew faster than consumer-facing activity, at 0.7% and 0.4% respectively. The revised aggregate therefore reflects gains across several industries rather than a uniform increase in every part of the economy.

Measured by expenditure, GDP also grew by 0.5%, mainly because of net trade, according to the ONS. Export volumes rose by a revised 2.8%, against an initial estimate of 0.5%; import volumes showed no growth, rather than the 0.5% increase first estimated. Household consumption rose by 0.3%, government consumption fell by 0.5%, and gross fixed capital formation increased by 0.9%. Business investment rose by 1.8%.

For households, real disposable income per head increased by 1.0% in the quarter after falling by 0.8% in the first three months of the year. The household saving ratio rose by 0.2 percentage points to 8.8%. Those measures add context to the GDP figure, but the ONS data do not establish that the improvement in household income will continue in later quarters.

What analysts and the Bank of England said

The Guardian reported that analysts viewed the UK's first-half growth as the strongest in the G7. Ashley Webb of Capital Economics told the newspaper the upward revision suggested the economy had been more resilient to higher energy prices than previously thought. He expected that resilience to fade later in the year as higher inflation squeezed real household incomes. That is a forecast, rather than a measured result for the second half.

RSM UK chief economist Thomas Pugh told the Guardian that surveys suggested positive momentum had carried into the third quarter and that his firm had raised its 2026 growth forecast to 1.4%. He also cited possible interest-rate rises, inflation and a tax-raising budget as potential winter headwinds. The differing figures concern different periods: the ONS's 0.5% is measured growth in one quarter, while RSM's 1.4% is an annual forecast.

In a separate record published on 30 September, the Bank of England's Financial Policy Committee said the likelihood of interconnected financial vulnerabilities materialising had risen since its previous meeting. It cited renewed uncertainty linked to the Middle East conflict and the possibility that strains in sovereign debt, risky asset valuations and credit markets could emerge together. The committee's assessment concerns financial stability; it does not say the ONS GDP revision signals a crisis.

The committee also said the financial system had been resilient so far. It judged UK households and businesses resilient in aggregate and said UK banks were appropriately capitalised and held high liquidity. Its warning identifies risks that need careful management, while its account of current conditions stops short of saying those risks have already become a financial crisis.

When the figures will be updated

The ONS says Blue Book 2026 is due on 30 October and the next quarterly national accounts release on 12 November. Those publications will provide further opportunities to assess the historical GDP profile and subsequent growth. Until then, the established change is a one-tenth-of-a-percentage-point increase in the estimate for April to June, alongside a separate warning about financial vulnerabilities and considerable uncertainty about the economy's next quarters.