UK Q2 growth slows to 0.4% as energy prices bite

Business Aug 13, 2026

The U.K.'s economic growth slowed to 0.4% in the second quarter of 2026, dropping from 0.6% earlier this year.

City economists saw it coming, with high energy prices, thanks to the Iran war, making things tough for businesses and households.

Even though there was some early resilience, continued high energy prices are now starting to weigh on growth.

Chancellor John Healey readies 1st budget

Chancellor John Healey is gearing up for his first budget on October 28, with support as energy prices stay high.

Andy Burnham recently supported a cut to VAT on electricity bills but admitted it might not be enough relief.

Inflation is expected to rise above June's 2.6%, and if prices keep climbing, the Bank of England may hike interest rates.