UK Economy grows 0.3% in Q2 as services and building work lift output

UK gross domestic product grew by an unrevised 0.3% in the three months to 30 June 2025, slowing from 0.7% in the first quarter, with services and construction offsetting a fall in production, according to the latest figures from the Office for National Statistics (ONS).

It comes as services rose 0.4% and construction 1.0%, while production slipped 0.8%. Within services, information and communication made the strongest contribution, up 2.5%, led by computer programming and consultancy, which grew 4.5%. Human health and social work rose 1.2%, while wholesale and retail trade fell 1.0%, mainly on weaker wholesale activity, tempering the sector’s overall gain.

Meanwhile, construction expanded 1.0% as both new work and repairs increased. Infrastructure new work rose 2.9%, while private housing repair and maintenance climbed 4.4%.

Production was the main drag on growth as Electricity, gas, steam and air-conditioning supply fell 7.2% amid declines in power generation and gas supply. Manufacturing edged up 0.2%, supported by pharmaceuticals, up 6.9%, and electrical equipment, up 4.1%, though most manufacturing subsectors weakened.

Spending data points to government consumption and investment as the main drivers of quarterly growth. Real government consumption increased 1.3%. Gross fixed capital formation rose 0.5%, with dwellings and other buildings and structures leading. Business investment fell 1.1% after a strong first quarter. Household consumption ticked up 0.1%; excluding net tourism effects, domestic consumption grew 0.4%.

In terms of trade, excluding non-monetary gold and other precious metals, the deficit in goods and services stood at 0.4% of nominal GDP in Quarter 2. Export volumes fell 0.2% as weaker goods exports offset stronger services; import volumes were flat, with higher goods imports offset by lower services imports.

Britain’s economy was the fastest growing among the G7 large advanced economies in the first half of this year.

ONS director of Economic Statistics Liz McKeown said: “Today’s figures include a suite of improvements to our measurement of the economy, including better information on research and development and the activities of complex multinational companies, alongside the usual inclusion of updated and improved data sources.

“Growth for 2024 as a whole is unrevised, though these new figures show the economy grew a little less strongly at the start of last year than our initial estimates suggested but performed better in later quarters. Quarterly growth rates for 2025 are unrevised. In the latest quarter we saw an increase in the household saving ratio, very little growth in consumer spending and a slight fall in output for consumer facing services, despite growth in services overall.”