UK economy grows by 0.4% in second quarter as some businesses helped by World Cup and hot weather – business live
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5h agoUK GDP grows 0.4% in second quarter helped by World Cup and weather
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The UK economy grew by 0.4% in the second quarter of 2026, in line with economists’ expectations, but with faster growth than expected in June as the football World Cup and warmer weather helped retailers and leisure sectors.
It follows growth of 0.6% in the first quarter, representing a fairly strong start to the year – at least in the context of recent history.
The Office for National Statistics (ONS) said that growth in the latest quarter was mainly caused by an increase of 0.5% in the services sector, the construction sector increased by 0.3%, while production output showed no growth.
The football World Cup was cited anecdotally by some businesses as a contributor to growth in June. GDP grew by 0.3% during June, after showing no growth in May. The ONS said:
The FIFA Football World Cup, which started on 11 June 2026, was cited as a reason for an increase in turnover in June 2026 by businesses in industries such as the manufacture of alcohol, wholesale, food and beverage serving activities, publishing activities, television production and advertising.
And the hot weather – the start of a long, hot summer in the UK and Europe – helped some businesses, while hindering others such as builders, as well as schools.
Some positive impacts were cited by some businesses across a range of manufacturing industries, retail, accommodation, and amusement and recreation activities. On the reverse, the warm weather was also cited as having a negative impact in terms of construction activities and in education, where schools were closed because of the heatwave.
More details to follow.
The agenda
10am BST: Eurozone industrial production (June; previous: -0.2%; consensus: -0.1%)
1:30pm BST: US producer price index inflation (July; prev.: -0.3%; cons.: 0.2%)
Key events
51m ago
Shein loses copyright claim against bitter Chinese fast fashion rival Temu
3h ago
Anthropic expected to be valued at $2tn in stock market float - report
3h ago
Five water companies allowed to raise bills further for data centres and housing
5h ago
UK GDP grows 0.4% in second quarter helped by World Cup and weather
Shein loses copyright claim against bitter Chinese fast fashion rival Temu
Chinese fast fashion retailer Shein has reportedly lost a lawsuit in London against its bitter rival Temu for alleged copyright infringement.
The two companies race to get new styles from Chinese factories to customers at prices that far undercut European rivals. Yet they have also engaged in tit-for-tat legal actions in the UK and the US, with each claiming the other is copying them.
Reuters reported that the latest claim in London’s high court was brought in relation to photos of some products. Shein had claimed Temu used its photos to advertise copies of those products. From Reuters:
The ruling, which comes as Shein aims for a $30bn to $40bn valuation in a Hong Kong initial public offering, concerns the first round of their London legal battle. Thursday’s ruling dismissed Shein’s claims for copyright infringement and upheld Temu’s counterclaim, seeking damages for having to remove listings when Shein obtained an injunction.
Temu’s separate counterclaim, alleging that Shein broke competition law by tying fast-fashion suppliers to exclusive agreements, is due to go to trial next year.
A Shein spokesperson said the company was surprised by the ruling:
We do not believe that is the right outcome for brands and rights holders seeking to protect their copyright online.
The biggest winner on London’s FTSE this morning is estate agent Savills. The FTSE 250 member is up 8.9% after it announced a jump in underlying pre-tax profits.
Revenue rose 9% in the first half of 2026 to £1.22bn, giving it underlying pre-tax profits of £34.3m. That was up 47%, although profits were down on a statutory basis to £7m because of one-off costs related to the acquisition of the American investment bank Eastdil Secured.
Savills was helped by strong property demand in the US, where it reported investment volumes up by 24%.
However, the company said the UK lagged behind, with investment down 12% – in part because of the latest political disruption. Savills said:
Sentiment in the UK market was more affected by the escalation of the Middle East conflict and its impact on interest rates, and after a positive Q1, activity slowed as investors assessed its implications and latterly those of anticipated political change in the UK.
AJ Bell investment director Russ Mould said the results “painted a pretty gloomy picture for UK real estate”. He said:
Savills’s predictions of a slump in house prices through the remainder of the year will be good news for prospective purchasers but bad news for anyone looking to sell their home in 2026.
Simon Shaw, group chief executive of Savills, said there had been “significant improvement in Savills’s performance”. He said:
Looking forward, the enlarged group’s pipelines are strong, and although transaction timelines are hard to predict in the current environment, I am confident that we are well positioned to deliver value to our clients, colleagues and shareholders.
The number of UK households behind on their mortgage payments fell in the second quarter, according to banking lobby group UK Finance.
There were 77,940 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2026, down 1% on the previous quarter, the group said on Thursday.
The figures suggest that, despite the cost of living pressures that are dominating prime minister Andy Burnham’s thinking, UK households’ finances may not be in too bad a state relative to other recent periods. That in turn might help explain the resilience of the UK economy this year.
Repossessions of houses from people who have not paid their mortgages also fell, and “are significantly below the long-term average”, UK Finance said. There were 1,150 repossessions, 8% less than in the previous quarter and 14% less than one year previously.
Ian Harris, president of National Association of Estate Agents Propertymark, a separate lobby group, said:
While these figures are encouraging, it is important not to lose sight of the financial pressures that continue to affect homeowners and landlords. The reduction in mortgage arrears and repossessions is welcome, but affordability remains a challenge for many across the housing market.
Europe’s industrial production remained flat in June, but that was a slightly better result than expected.
Industrial production in the eurozone remained unchanged, and was up by 0.2% in the EU, according to first estimates from Eurostat, the statistical office of the European Union.
That was marginally better than the 0.1% expected by economists polled by Reuters. In May 2026, industrial production grew by 0.3% in the eurozone and the EU.
However, Europe’s economy will do well to sustain output over the rest of the summer – particularly given the European droughts that have caused low water levels in the Rhine river, a crucial conduit for Germany’s industry.
Germany’s inland navigation agency, WSV, on Tuesday said the navigable water depth at the chokepoint of Kaub near Koblenz was 15 cm on Tuesday, below the previous lowest recorded level of 25 cm in 2018. With no sign of rains to refill the waterways, the river may remain difficult for fully laden ships to navigate for some time.
Jillian Ambrose
Enough new coalmining projects were proposed last year to increase global supplies by 2.5bn tonnes a year, an increase of 11% from the year before, even as demand for coal plateaus, according to a new report.
Global Energy Monitor, an NGO, found that India ignited a rise in new coalmine proposals in 2025 despite a global slowdown in the number of mine openings because of falling demand for the fossil fuel.
The increase was driven almost entirely by the states of Jharkhand and Odisha, which doubled their proposals for new coalmines in line with an ambitious plan from India’s ministry of coal to increase the country’s output.
You can read the full story here:
Carmakers in the UK constantly complain that they are being forced into unsustainable discounts to sell electric cars. Yet it is a similar picture for petrol and hybrid cars as well, according to data from Insider Car Deals.
In fact, the average discount on a hybrid car has risen above that on petrol cars, as carmakers try to attract buyers. The average hybrid saving rose from 8.7% to 11.0% in 12 months, now worth £6,045, Insider Car Deals said.
Petrol discounts average 10.3%, or £4,599. Discounts on EVs are still ahead of hybrids, at 11.9%, or £6,455, although average EV savings have actually fallen over the past year.
Pat Hoy, founder of Insider Car Deals, said:
For the last few years the really eye-catching new-car discounts have tended to be associated with electric cars. What is interesting now is just how quickly hybrids have caught up.
The average hybrid saving has gone from 8.7% to 11% in a year and is now ahead of petrol. At the same time, the average discount on an EV has actually edged backwards.
The Audi A5 plug-in hybrid was the most discounted in the company’s data, with an average saving of 24.7%.
Anthropic expected to be valued at $2tn in stock market float - report
Speaking of datacentres, there are some interesting stories around today about one of the companies driving the artificial intelligence boom.
Anthropic, the maker of the Claude chatbot, is expected to target a valuation of $2tn or more in a float this autumn, the Financial Times reported. It said:
Half a dozen of the company’s backers told the FT that Anthropic’s rapidly rising revenue would enable it to more than double its current valuation in a planned autumn float. A listing at that level could unlock billions of dollars in gains for the five-year-old company’s early investors but would also test public markets that are growing more nervous about the AI boom. Anthropic’s backers say booming demand for the lab’s advanced AI models and tools justifies their lofty expectations.
The valuation would raise pressure on its big rival, OpenAI, which is also planning a stock market float. It would also confirm chief executive Dario Amodei as one of the richest people in the world.
Anthropic is also on the hunt for takeovers. Bloomberg reported the company is in talks to buy the artificial intelligence startup Decart AI for about $6bn, citing to people familiar with the matter. It said:
Decart makes so-called world models, which aim to simulate the physical world, as well as software that can reduce the cost of training AI by helping chips work more efficiently. The latter tech could help Anthropic’s existing infrastructure absorb more demand, according to a person familiar with the matter. Anthropic, which rarely makes large acquisitions, has been spending heavily on computing power to develop new products and serve customers.
Five water companies allowed to raise bills further for data centres and housing
Five English water companies will be allowed to further raise household bills to fund an extra £3.4bn in spending on infrastructure for datacentres, new housing, and to try to scrub harmful “forever chemicals”.
Southern Water will be allowed the largest bills increase of an average of £43 in the 2027/28 financial year, and £37 in 2029/30, Ofwat, the regulator for England and Wales, said on Thursday.
The government introduced a process for companies to appeal for more cash if costs change within the five-year periods in which bills are set. Nevertheless, the extra spending is likely to prove controversial, given the scrutiny on the privatised water companies’ failings – and large executive pay packets.
13 water companies asked Ofwat to be allowed to raise customer bills to fund works valued at £4.3bn. Ofwat granted permission for £3.4bn in works, but only five of the companies will be able to raise bills.
Wessex Water bills will rise by £4 and then £7 for its customers in south-west England. Thames Water, supplier to London and the Thames valley, will be allowed to charge another £3 and then £5, as will Severn Trent, supplier to Bristol, the Midlands and east Wales. South East Water will be allowed to charge another £1 in 2029/20.
Ofwat said the some of the works funded would include supplies to datacentres in Manchester, which have large water needs for cooling, more infrastructure for tourists in Newquay, Cornwall, and upgrades to Wessex Water’s waste treatment works to remove non-stick “forever chemicals”, formally known as Pfas stands for per- and polyfluoroalkyl substances.
Helen Campbell,executive director for delivery at Ofwat, said:
The cost change process strengthens the ability of companies to deliver without delay. The newly agreed funding will help unlock much-needed new housing development and boost business growth across a range of sectors, as well as improving drinking water quality and the removal of PFAS and forever chemicals.
We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.
The biggest factor for the FTSE 100’s underperformance on Thursday morning relative to other European markets is a big decline in the mining sector.
Chilean miner Antofagasta is the biggest faller on London’s benchmark index, down 4.9% after it cut its guidance for future output.
Reuters reported:
The London-listed miner cut its 2026 copper output estimate to between 625,000 and 655,000 metric tons, from a previous forecast of 650,000 to 700,000 tons, due to a shutdown at its Los Pelambres mine in July after extreme rains prompted Chile’s government to declare a “state of catastrophe” in the Coquimbo Region.
While there has been no material impact on key equipment and infrastructure, the miner said it will need to repair some pipeline platforms and water management systems.
That appears to have pulled down the rest of London’s sizeable mining contingent with it. Rio Tinto was down 4.6%, Fresnillo dropped 4%, while Endeavour and Anglo American dropped 3.3% and 2.9% respectively.
Across Europe stock markets are mostly doing better than the FTSE 100 in London.
The pan-European Stoxx 600 gained 0.2%. Germany’s Dax index was up 0.4%, while France’s Cac 40 rose 0.2%. Italy’s FTSE MIB rose 0.5%.
Ladbrokes owners Entain said its revenues were up 5% after stronger-than-expected performance during the first half of the year – helped by the football World Cup.
The FTSE 100 bookmaker said that the number of first time depositors during this year’s World Cup was double those seen during the 2022 version.
Revenues, or customer losses, rose to £2.5bn during the first six months of the year.
Stella David, chief executive of Entain, said:
I am pleased with Entain’s start to 2026 with strong momentum and volume growth continuing as well as strong player engagement across the group throughout the World Cup tournament.
European stock markets have opened. The FTSE 100 in London has dipped marginally, down 0.1% in the first few minutes of trading.
Intercontinental Hotels Group is the biggest riser, up 1.8% after results earlier this week.
Betting company Entain is also up 1.4% after it reported a World Cup boost to its business.
Here is what recent UK economic performance looks like. There is something of a patttern of stronger starts to the year, followed by a weaker second half.
The UK economy has set an impressive pace in the first half of the year. If it continues, GDP would grow by 2% this year.
That would represent a strong year in recent terms (discounting the anomaly of the coronavirus pandemic).
Sanjay Raja, chief UK economist at Deutsche Bank, said:
The UK economy showed no signs of stopping over spring. After a thumping start to the year, UK GDP expanded by 0.4% q/q, taking the annualised growth rate in the first half of the year to a scorching 2%. And for a second straight quarter, it looks like the UK will take top place in the G7 league table. Yet again forecasters will be forced to revisit their forecasts with another marginal upgrade looking likely for the year (to 1.1%).
What happened in Q2-26? In short, households spent more than anticipated. Hotter weather saw consumers ramp up spending. The World Cup may have also had an effect in keeping June GDP on an upward trajectory with retail, hospitality, and advertising revenues all up on the month (June GDP was up 0.3% m/m). Businesses weren’t shy in investing either – despite the Middle East conflict.
Looking ahead, while the UK economy has been on a tear lately, some slowdown remains likely – reflecting recent patterns in GDP data (i.e. a strong start, followed by a weaker more subdued second half). Indeed, the energy crisis will likely catch up with households and business in Q3-26, as dual fuel bills rise. Elevated pump prices will also continue to squeeze on real disposable incomes.
The UK economy is estimated to be 1.2% bigger than it was a year ago.
Real GDP per person is estimated to have increased by 0.4% in the second quarter, up 1.0% compared with the same quarter a year ago.
These are the first UK GDP figures for Andy Burnham’s chancellor John Healey to respond to (although they do not cover the period in which he started in his new post). Healey said:
I know people are worried about the impact of the conflict in the Middle East on their cost of living, which has been too high for too long and it has added pressure on British businesses.
This is an active, hands-on government, putting British interests first – giving breathing space to those feeling the strain, making our country more resilient and bringing hope back.
We’ve seen the fastest growth in the G7 this year, but we now need to double down and drive growth in every postcode.
The US-Israeli war on Iran has been perhaps the dominant global economic narrative of 2026, but the effects on the UK economy still appear unclear, said the ONS.
We know that higher oil prices have immediately fed through to higher inflation, but there has so far been limited evidence of what Bank of England governor Andrew Bailey has termed “second-order effects” of price pressures spreading through the UK economy.
Businesses are definitely alert to the threat from the conflict, which started at the end of February. However, the ONS put the war in the basket of “difficult to quantify their exact impact”.
The ONS said
The conflict in Iran, which started at the end of February, has been referred to by various businesses in terms of June 2026 data. These comments were cited in some manufacturing industries, wholesale, land transport services, warehousing and travel agencies. However, it should be noted that fewer comments to the survey referring to the Iran war were provided in June 2026 compared with previous months, which coincided with a period of ceasefire.
This downward trend was also cited in our Business Insights and impact of the UK economy: 2 July 2026 bulletin. In June 2026, 31% of businesses with 10 or more employees reported concern about international conflict affecting supply chains over the next year; this was a continued fall from the recent peak this April (38%).
UK GDP grows 0.4% in second quarter helped by World Cup and weather
Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.
The UK economy grew by 0.4% in the second quarter of 2026, in line with economists’ expectations, but with faster growth than expected in June as the football World Cup and warmer weather helped retailers and leisure sectors.
It follows growth of 0.6% in the first quarter, representing a fairly strong start to the year – at least in the context of recent history.
The Office for National Statistics (ONS) said that growth in the latest quarter was mainly caused by an increase of 0.5% in the services sector, the construction sector increased by 0.3%, while production output showed no growth.
The football World Cup was cited anecdotally by some businesses as a contributor to growth in June. GDP grew by 0.3% during June, after showing no growth in May. The ONS said:
The FIFA Football World Cup, which started on 11 June 2026, was cited as a reason for an increase in turnover in June 2026 by businesses in industries such as the manufacture of alcohol, wholesale, food and beverage serving activities, publishing activities, television production and advertising.
And the hot weather – the start of a long, hot summer in the UK and Europe – helped some businesses, while hindering others such as builders, as well as schools.
Some positive impacts were cited by some businesses across a range of manufacturing industries, retail, accommodation, and amusement and recreation activities. On the reverse, the warm weather was also cited as having a negative impact in terms of construction activities and in education, where schools were closed because of the heatwave.
More details to follow.
The agenda
10am BST: Eurozone industrial production (June; previous: -0.2%; consensus: -0.1%)
1:30pm BST: US producer price index inflation (July; prev.: -0.3%; cons.: 0.2%)
Reporting from The Guardian contributed to this story.
