The UK economy expanded by 0.4% in the second quarter of 2026, with services and business investment supporting another period of growth after a 0.6% increase at the start of the year.
Figures from the Office for National Statistics show real gross domestic product was 1.2% higher than in the same quarter of 2025. Real GDP per head increased by 0.4% during the quarter and was 1.0% higher year-on-year.
The economy finished the quarter more strongly than it began. GDP grew by 0.3% in June after no growth in May and a 0.1% contraction in April. The May estimate was revised down from an earlier reading of 0.1% growth.
Services remained the largest contributor, expanding by 0.5%. Both business-facing and consumer-facing services grew, although the strongest contributions came from information and communication, and professional, scientific and technical activities.
Information and communication output rose by 2.7%, driven by a 3.7% increase in computer programming, consultancy and related activities. Professional, scientific and technical activities grew by 1.7%, with advertising and market research, scientific research and development, and legal activities all recording increases.
The figures place technology-related and knowledge-intensive services among the strongest parts of the economy during the quarter. Investment also strengthened, with business investment rising by 1.7% from the previous three months and by 0.8% compared with the same period in 2025.
Gross fixed capital formation increased by 1.2%. Information and communication technology, and other machinery and equipment, were among the areas supporting capital formation, giving the quarter a broader investment component alongside the expansion in services.
Performance across production was more uneven. Overall production output was flat, although manufacturing increased by 1.0%. Seven of 13 manufacturing subsectors expanded during the quarter, led by basic pharmaceutical products and pharmaceutical preparations.
Electricity, gas, steam and air-conditioning supply fell by 2.3%, while water supply, sewerage, waste management and remediation activities declined by 3.7%.
Construction increased by 0.3% during the quarter, with both new work and repair and maintenance contributing. Infrastructure new work rose by 1.9%, although total construction output remained 2.0% below its level a year earlier.
Household consumption provided another positive contribution, rising by 0.3% in real terms. Government consumption moved in the opposite direction, falling by 0.3% as health and education activity declined.
Trade continued to weigh on the expenditure picture. Export and import volumes both increased by 0.5%, while the combined goods and services trade deficit was estimated at 2.1% of nominal GDP. Excluding non-monetary gold and other precious metals, the deficit stood at 1.0%.
The composition of growth leaves a mixed picture beneath the headline figure. Business services, technology-related activity and capital investment strengthened, while parts of utilities, construction and public consumption remained under pressure.
The increase in business investment is particularly relevant after a prolonged period in which weak capital spending has been one of the constraints on UK productivity. A single quarter does not establish a sustained investment cycle, but the combination of higher business investment and growth in computer programming and consultancy provides evidence of companies continuing to commit capital despite relatively high borrowing costs.
The figures also add to the debate over the appropriate path for interest rates. Stronger output reduces evidence of an imminent contraction at the same time as the Bank of England continues to assess inflationary pressure from energy, wages and domestic price-setting.
Sector differences remain substantial. Construction is still below last year’s level, production has yet to contribute meaningfully to overall growth, and services continue to carry much of the expansion. That dependence leaves the economy sensitive to changes in business confidence and household demand even as investment improves.
The ONS cautions that early GDP estimates are subject to revision as more information becomes available. Its Blue Book 2026 work will publish revisions covering 1997 to 2024 on 20 August, while the quarterly national accounts on 30 September will provide further updates to data from 2025 onwards.
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