UK gross domestic product (GDP) increased by 0.4% in the three months to June, down from 0.6% in the three months to May, the Office for National Statistics (ONS) has revealed.

The latest data also follows growth of 0.8% in April, demonstrating a slowdown in the UK economy following a positive start to the year.

The ONS stated that services output was the largest contributor to this GDP growth, increasing by 0.5% in June. Construction output grew by 0.3%, while production output showed no growth.

Month-on-month, GDP grew by 0.3%, after showing no growth in May, having been revised down from 0.1% growth.

The monthly growth was driven by 0.4% in services and was partially offset by falls of 0.2% in production and 0.1% in construction.

Head of fixed interest research at Quilter Cheviot, Richard Carter, said the UK economy has shown a fair amount of resilience in Q2.

He added: "While still subject to revision, this backs up a first quarter figure of 0.6%, certainly a long way from a lot of the gloom that came in the immediate aftermath of the conflict in Iran and the wider Middle East erupting. Services continue to do the bulk of the work for the economy, with production and construction both suffering falls in June.

"While the growth is nothing to write home about, it is perhaps reflective of the fact that the economy was in a more robust shape than thought given what the first six months have thrown up so far.

"Unfortunately, the UK has been in this position before, with the first half of 2025 delivering a strong level of growth, only for GDP to grind to a halt in the second half. It is likely a similar trend may emerge again, even with a new prime minister keen to boost consumer confidence."

Chief sales and marketing officer at Phoebus, Richard Pike, has also warned that this subdued growth could continue, as energy prices have remained high and volatile as a result of the Middle East conflict, and the Bank of England expects inflation to rise again this year.

He concluded: "That combination of higher costs and higher rates is squeezing business investment and household confidence at the same time, and a small increase in GDP doesn't undo that backdrop. We're already seeing a similar pattern in housing - June's net mortgage borrowing more than doubled, and property transactions edged up after two months of decline - but in both cases the underlying momentum is far softer than the headline number suggests.

"For lenders, steady growth and market conditions means managing a genuinely heavy workload - a wave of fixed-rate maturities, borrowers facing real payment shock as they roll onto higher rates, and completions still working through the system on a time lag. However, the rise is clearly good news for the economy and should continue to build market confidence overall."

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