The UK economy grew faster than previously thought in the second quarter, after the Office for National Statistics (ONS) revised its previous estimate from 0.4% to 0.5% between April and June.

This followed unrevised growth of 0.6% in the first quarter, while annual growth was revised up to 1.4% year-on-year from 1.2% y/y.

"The revisions point to somewhat stronger momentum through the middle of the year, with the level of GDP now estimated to be 2.0% above Q4 2024, compared with 1.9% in the first estimate," said Lloyds in its Market Insights Daily,noting that "underlying the improvement was primarily stronger net trade".

The ONS also revised down full-year GDP growth for 2025 to 1.2% from 1.3%, while the level of GDP in the second quarter was 2.0% above the final quarter of 2024, up from the previous estimate of 1.9%. Real GDP per head increased 0.5% in the second quarter and was 1.2% higher than a year earlier.

The latest estimates also indicate an improvement in household finances. Real household disposable income per head increased by 1.0% q/q, reversing the 0.8% q/q decline recorded in Q1, while the household saving ratio edged up to 8.8% from 8.6%. Household consumption grew modestly by 0.3% q/q.

"The revisions suggest that growth in Q2 was somewhat stronger and more broadly supported than indicated by the preliminary estimate, leaving the economy on a firmer footing entering the second half of the year," Lloyds added.

Danni Hewson, head of financial analysis at AJ Bell, welcomed the revised figures but warned of dark clouds ahead.

Hawson said: "Good news about the resilience of the UK economy will help reinforce the ‘good vibes’ this government is keen to instil, but there’s no doubt that all of us, especially the chancellor, have one eye on the horizon.

"But whilst it’s important to celebrate the resilience of the UK economy despite the headwinds of global instability, there’s no getting away from rising prices. There are plenty of menacing dark clouds hinting at more pain for household budgets – pain which the Treasury has little scope to prevent.

"Good vibes can lift confidence, but they can’t keep people warm."

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