The Office for National Statistics left UK gross domestic product growth at 0.3% for the second quarter on Tuesday, while revised trade figures showed a wider goods deficit as import volumes rebounded.
Output breakdown
Services output grew 0.2% in Q2, led by professional services and information technology. Production fell 0.4%, with manufacturing down across chemicals and machinery. Construction output was flat after a strong first quarter.
Household consumption rose 0.2%, while government consumption increased 0.5%, reflecting higher public-sector pay awards feeding through to spending.
Trade revision
The goods trade deficit widened by £1.2 billion in the latest estimate, as intermediate goods imports for manufacturing picked up. Exporters in pharmaceuticals and aerospace reported steady demand from the United States and the European Union, but volumes were not enough to offset higher imports.
Downing Street response
Number 10 said the figures confirm the economy is growing after last year’s stagnation, pointing to falling inflation and rising real wages. Opposition parties countered that per-capita output remains below pre-pandemic trends.
The Bank of England noted the release in passing ahead of its November meeting, with markets still pricing a gradual path of rate cuts rather than an immediate move.
Analysts expect Q3 data to hinge on retail sales around the late-summer bank holiday and on energy prices feeding into utility bills. For now, the statistical story is one of modest expansion with persistent external imbalances.
Regional picture
ONS experimental regional estimates suggested London and the South East accounted for most service-sector growth, while the North West saw factory output slip on weaker export orders to Germany. Wales benefited from public-administration spending tied to rail projects.
Household saving ratios ticked up slightly, implying consumers remain cautious despite real wage growth—a pattern consistent with mortgage resets still working through fixed-rate expiries.
Business investment intentions surveys from the British Chambers of Commerce pointed to a modest pickup in Q3, but respondents cited skills shortages as the top constraint rather than financing costs.