Data from the ONS shows the UK economy growing by +0.4% in June (compared to May); combined with an upward revision for April (to -0.1% from -0.3%), this meant that in the 2nd period of the year, the economy grew by +0.3% quarter-on-quarter. All three of the main sub-sectors of the economy – services, construction and manufacturing – grew.
As with our note on the UK manufacturing sector, we will concentrate on the quarterly data for the economy overall. In the 1st quarter of the year, the positive growth rate in 2025 was slower than recorded in the equivalent period in 2024 (despite being +0.7%) and the same thing has happened in the 2nd quarter. As a result, the annualised growth rate (the cumulative trend over the past 4 quarters) has slipped again to +1.2% (from +1.3% to the end of Q1-2025 and +1.5% for Q4-2024).
As we have a separate note about manufacturing, we will confine ourselves here to a reminder that output of the sector grew by +0.3% compared to the previous quarter; you may have seen a headline that showed “production” falling in Q2-2025 but this was mainly due to “electricity, gas, steam & air conditioning supply” declining by -6.8%.
The size of the service sector in the UK economy (broadly 80%) means that it will have the greatest influence on the whole economy figures, so it is little surprise that the growth in output of this sector at +0.4% was similar to the overall figure. In the quarter-on-quarter trend, consumer-facing services expanded by +0.3% with other services seeing growth of +0.4%. Overall, the service sector was +1.2% larger than a year ago.
Within services, the largest contribution to growth came from “information & communication” (+2.0%), with “computer programming, consultancy % related activities” (+4.1%) making the largest impact to this trend. The second largest positive contribution to service sector growth was “human health & social work activities” (+1.1%). The largest negative contributor to growth in Q2-2025 was “wholesale & retail trade”.
The construction sector saw output increase by +1.2% compared to the 1st quarter and it was +2.2% higher than a year ago. The growth in the latest quarter was split fairly evenly across the sector, with “new work” increasing by +1.1% while “repair & and maintenance” expanded by +1.4%. There are more details in the range of ONS Statistical Bulletins which can be downloaded from their website at https://www.ons.gov.uk/releasecalendar (14 August) or on request from MTA.