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🇳🇬 Nigeria /Economy & Trade

UK economy slows in second quarter amid political unrest and Middle East war fallout

From The Punch · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Britain's economy grew by 0.4% in the second quarter, a slowdown from the previous quarter's 0.6% expansion, according to the Office for National Statistics.
  • The slowdown occurred despite a robust services sector and construction growth, with the national statistics office citing domestic political unrest and the impact of the US-Iran war on energy costs.
  • The government highlighted efforts to ease the cost of living, while business groups urged measures to boost trade, investment, and productivity.

Britain's economy experienced a slowdown in the second quarter of 2026, with Gross Domestic Product (GDP) increasing by 0.4 percent. This marks a deceleration from the 0.6 percent growth recorded in the first quarter, as reported by the Office for National Statistics (ONS) on Thursday.

Growth (overall) slowed in the second quarter of the year, following a strong start to 2026, but remained relatively robust.

— Liz McKeownONS Director of Economic Statistics, commenting on the GDP data.

Despite the overall slowdown, the national statistics office described the economic output as "robust." Growth was primarily driven by the services sector, which expanded by 0.5 percent, and the construction industry, which also saw growth. However, the production sector remained flat. The ONS noted that the second quarter finished strongly, with a 0.3 percent expansion in June, following a flat May and a slight dip in April. The recent football World Cup was cited as a factor contributing to increased turnover in various industries, including food and beverage services, publishing, and television production.

Services were once again the main driver of growth.

— Liz McKeownONS Director of Economic Statistics, highlighting the performance of the services sector.

However, the economic performance was impacted by a combination of domestic political instability and the international fallout from the US-Iran war, which has sent energy costs soaring. The country is still grappling with elevated inflation, and the conflict in the Middle East has added pressure on British businesses. Prime Minister Andy Burnham's government, which took office after Keir Starmer's resignation in June, is focusing on easing the cost of living for households, including plans to remove electricity bill taxes this winter.

I know people are worried about the impact of the conflict in the Middle East on their cost of living, which has been too high for too long, and it has added pressure on British businesses.

— John HealeyBritain's new finance minister, addressing concerns about inflation and the Middle East war.

New finance minister John Healey stated that the Labour government is a "hands-on government, putting British interests first, giving breathing space to those feeling the strain, making our country more resilient and bringing hope back." He acknowledged public concerns about the impact of the Middle East conflict on living costs. Meanwhile, business organizations urged the government to implement measures that would foster stronger, sustainable growth. The British Chambers of Commerce called for Healey's upcoming budget to be a "game changer" and stressed the need for policies that boost trade, investment, and productivity.

the headline figures shouldn’t disguise the cocktail of cost pressures choking long-term business growth.

— Stuart MorrisonResearch manager at the British Chambers of Commerce, commenting on the economic challenges.
DistantNews Editorial

Originally published by The Punch in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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