UK GDP grows 0.4% in Q2, but momentum may fade as headwinds build.

The UK economy expanded by 0.4% in Q2, following stronger 0.6% growth in Q1, with services leading the way. Consumer spending proved surprisingly resilient, helped by warmer weather and the World Cup giving retail and leisure businesses a welcome boost. But the positive economic growth news may be running out of steam. Geopolitical tensions, particularly the Iran conflict, have pushed up energy prices, while higher household energy costs could squeeze real incomes and consumption. With inflationary pressure lingering, weaker consumer demand and rising costs could make the second half of 2026 a tougher economic test.

UK economy grows but experts warn of challenging months ahead - BBC News

1. Explain what is meant by ‘real quarterly UK GDP growth’.

2. Assess two ways that resilient consumer spending has contributed to economic growth in the UK.

3. Discuss why some economists expect the growth rate to slow in the second half of 2026.