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UK economy grows 0.4% in Q2 as higher oil prices loom
UK services grew 0.5% in the quarter, while analysts warned war-linked oil price shocks could feed into inflation later this year.
The UK economy grew 0.4% between April and June, official data showed, suggesting businesses and consumers have so far absorbed major shocks tied to the war in Iran and higher oil prices, according to OilPrice.
The Office for National Statistics data also showed a surprise boost of 0.3% in June, while production was flat and the construction sector expanded 0.3%. City economists polled by Bloomberg had expected second-quarter growth of 0.4%, and they anticipated June total output would decline by 0.1%.
OilPrice noted that the services sector drove the quarter higher, rising 0.5%, while analysts cautioned the first-half rebound may have been flattered by one-off factors such as the World Cup and heatwaves.
Schroders senior economist George Brown said the economy appeared resilient, but he added that seasonal effects could be overstating activity, even as oil price pressure from Iran-related risks threatens to raise inflation later in the year.