UK economic growth slows in second quarter amid political unrest and Mideast war
Britain's economy experienced a slowdown in the second quarter of the year, with Gross Domestic Product increasing by 0.4 percent from April to June, following a 0.6 percent expansion in the first quarter. The Office for National Statistics reported that output remained "robust" despite domestic political changes, including Keir Starmer's resignation as Prime Minister and his replacement by Andy Burnham, and the ongoing US-Iran war. The conflict has contributed to soaring energy costs, exacerbating inflation for millions of Britons. New finance minister John Healey acknowledged public concerns about the impact of the Middle East conflict on the cost of living and its pressure on British businesses. The services sector was the primary driver of growth, expanding by 0.5 percent, with construction also growing while production flattened. The ONS noted a strong finish to the quarter in June, partly attributed to the recent football World Cup boosting various industries. However, Stuart Morrison of the British Chambers of Commerce cautioned that underlying cost pressures are hindering long-term business growth, urging Healey's upcoming budget to focus on boosting trade, investment, and productivity. Prime Minister Burnham has prioritized easing household cost of living, including removing tax on electricity bills this winter. The Bank of England has warned that inflation is expected to rise due to sustained high energy prices from the Mideast war.
