UK economy grows faster than first thought as household incomes bounce back

Revised official figures show stronger economic growth, rising household incomes and a surge in exports, with Britain outperforming Germany, France, Italy and the US during the second quarter of 2026

Britain’s economy grew faster than previously thought between April and June, with household incomes recovering and exports surging, according to official figures released today.

The Office for National Statistics (ONS) has revised its estimate of UK economic growth between April and June from 0.4 per cent to 0.5 per cent. It follows growth of 0.6 per cent between January and March.

The latest figures put Britain ahead of Germany, France, Italy, Japan and the U.S during the second quarter, with only Canada recording stronger growth among the G7 economies.

Household finances also improved, with real disposable income per head, which accounts for inflation, rising by 1 per cent after falling by 0.8 per cent during the previous quarter.

Real household disposable income per head rose to £6,577 during the second quarter, driven largely by increased social benefits and higher wages.

Households also saved slightly more, with the proportion of disposable income being put aside rising from 8.6 per cent to 8.8 per cent.

Exports rose sharply during the quarter, while imports remained unchanged, giving Britain’s economy a substantial boost from international trade. The ONS said: “Growth in the latest quarter was mainly driven by net trade.”

The services sector, meanwhile, which accounts for the largest share of the UK economy, expanded by 0.6 per cent, supported by professional, scientific and technical activities.

The ONS found scientific research and development grew by 6.7 per cent, advertising and market research increased by 5.4 per cent, and computer programming and related activities expanded by 3.6 per cent.

Construction output rose by 0.8 per cent, supported by commercial building and infrastructure projects, while manufacturing recorded growth of 0.5 per cent.

And business investment also strengthened, increasing by 1.8 per cent during the quarter and standing 5.2 per cent above its level during the same period last year.

Consumer spending increased more modestly, rising by 0.3 per cent, with clothing, footwear, restaurants, hotels and housing among the main contributors.

But the revised figures also revealed weaknesses, with overall production output falling by 0.1 per cent and government consumption declining by 0.5 per cent, partly because of school closures during June’s heatwave.

Government borrowing also increased from 4.2 per cent to 5.2 per cent of quarterly GDP.

The ONS additionally revised its estimate of economic growth for 2025 downwards from 1.3 per cent to 1.2 per cent.

Despite that adjustment, Britain’s economy is now estimated to have been 2 per cent larger in the second quarter of 2026 than in the final three months of 2024, slightly above the 1.9 per cent previously estimated.

However, the ONS warned that the figures could still change as more detailed economic information becomes available, adding: “The early estimates of GDP are subject to revision (positive or negative).”

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_{Main image: Container cranes at the Port of Felixstowe, where international shipping plays a key role in Britain’s economy. Revised figures show UK exports surged by 2.8 per cent in the second quarter of 2026, helping drive stronger-than-expected economic growth. Credit: Bob Jones / CC BY-SA 2.0}