The UK economy grew more strongly than expected in the second quarter of 2026, official figures showed today, defying warnings that the conflict in the Middle East would deal a heavier blow to growth.

Gross domestic product rose by 0.4% in the three months to June, according to the Office for National Statistics, following growth of 0.6% in the three months to May – itself revised down from an earlier estimate of 0.7% – and an unrevised 0.8% in the three months to April. Services output, the economy's dominant sector, grew by 0.5% over the quarter, while production output flatlined and construction slowed sharply to 0.3% growth from 1.5% in May.

Month-on-month, the picture brightened. GDP grew by 0.3% in June alone, having shown no growth in May and having fallen by 0.1% in April, with a 0.4% rise in services doing the heavy lifting against small declines in production and construction.

Warm weather and the start of the World Cup were credited with lifting consumer spending in June. Ben Jones, senior economist at the CBI, called the figures encouraging and said the UK had so far proved more resilient to the fallout from the Iran war than had been widely expected. He cautioned, however, that uncertainty around the new government and the Autumn Budget could yet prompt businesses to keep investment plans on ice, and that continued instability in the Middle East left the economy exposed to fresh volatility in energy markets. With the Prime Minister turning his attention to the cost of living this week, Jones argued the priority should be tackling the cost of doing business, from industrial electricity prices to business rates reform.

The optimism was echoed by Derrick Dunne, chief executive of YOU Asset Management, who pointed out that the IMF had forecast just 1% growth for the UK in 2026 back in May – a benchmark today's figures suggest the country is on course to beat. He noted that heatwave-related school closures had weighed on services and government output during June, but that the UK was nonetheless outpacing France, Germany and Italy and matching the United States on quarterly growth. For Dunne, the figures raise a different question: what happens to inflation next, and how that shapes the Bank of England's next move on interest rates. Both the Bank and the IMF have pencilled in higher inflation than is currently materialising, he observed – suggesting the pessimism runs deeper than growth figures alone would indicate.

Not every voice was quite so upbeat. Kevin Brown, a savings specialist at Scottish Friendly, welcomed the resilience shown in the data but warned it may not last. Should the Middle East conflict continue into the autumn, he said, the Treasury's own modelling points to a serious hit to growth next year, as rising prices squeeze household spending. His advice to savers was practical rather than celebratory: build up a cash buffer, shop around for savings rates and energy tariffs, and consider putting spare cash to work in the stock market while returns remain more attractive there than in cash.

Between them, the three verdicts paint a familiar picture – an economy that has weathered the storm rather better than feared, but one still waiting to find out whether that storm has actually passed.