UK economy grows by 0.4% in second quarter as some businesses helped by World Cup and hot weather – business live

The UK economy demonstrated robust growth in the second quarter of 2026, expanding by 0.4% quarter-on-quarter. This performance contributed to a significant 2% annualised growth rate for the first half of the year, a pace described by Deutsche Bank's chief UK economist, Sanjay Raja, as 'scorching'. The Office for National Statistics data indicates that this growth was largely propelled by stronger-than-anticipated household spending, with consumers increasing outlays due to hotter weather. The football World Cup also played a crucial role, particularly in June, boosting revenues in retail, hospitality, and advertising sectors.

0.4% Growth Drivers

The 0.4% expansion in the second quarter was a notable achievement, especially following a strong start to the year. This growth trajectory suggests a resilient economy, with businesses also showing willingness to invest despite ongoing geopolitical concerns, such as the Middle East conflict. The specific impact of the World Cup was highlighted by betting company Entain, owners of Ladbrokes, which reported a 5% increase in revenues for the first half of the year. They noted a doubling of first-time depositors during this year's tournament compared to the 2022 edition, underscoring the event's significant economic stimulus for certain industries.

However, the article also points to potential headwinds. Forecasters anticipate a likely slowdown in the second half of the year, reflecting historical patterns of stronger starts followed by more subdued periods. The looming energy crisis is expected to impact households and businesses in Q3-26 as dual fuel bills rise, and elevated pump prices will continue to squeeze real disposable incomes. These factors could temper the impressive growth seen in the first half, posing challenges for sustained economic momentum.

G7 League Table

For the second consecutive quarter, the UK is projected to lead the G7 league table in economic growth. This strong performance has prompted economists, including Sanjay Raja, to revise their annual forecasts upwards, with a marginal upgrade to 1.1% growth for the year now looking likely. This position at the top of the G7 underscores the UK's relative economic strength compared to its peers, providing a positive narrative for the government.

Chancellor John Healey, responding to these figures, acknowledged public concerns about the cost of living and the impact of the Middle East conflict. He emphasized the government's active approach to putting British interests first, aiming to provide 'breathing space' and enhance the country's resilience. The G7 leadership position offers a strong talking point for the government, suggesting effective economic management despite external pressures.

Antofagasta's Output Cut

Despite the overall positive economic news, the FTSE 100 experienced underperformance compared to other European markets, largely due to a significant decline in the mining sector. Chilean miner Antofagasta was the biggest faller on London's benchmark index, with its shares dropping 4.9%. This decline followed the company's decision to cut its 2026 copper output estimate to between 625,000 and 655,000 metric tons, down from a previous forecast of 650,000 to 700,000 tons.

The revision was attributed to a shutdown at its Los Pelambres mine in July, caused by extreme rains that led Chile's government to declare a 'state of catastrophe' in the Coquimbo Region. While key equipment and infrastructure remained largely unaffected, the miner needs to repair pipeline platforms and water management systems. This specific issue at Antofagasta had a ripple effect, pulling down other major London-listed mining companies, including Rio Tinto (down 4.6%), Fresnillo (down 4%), Endeavour (down 3.3%), and Anglo American (down 2.9%), highlighting the sector's sensitivity to operational disruptions and commodity price forecasts.