Chief Secretary to the Treasury Emma Reynolds has welcomed official figures showing UK GDP grew by 0.5% in the second quarter of 2026, with business investment 5.2% higher than a year earlier.
The Office for National Statistics revised its estimate of growth for April to June up by 0.1 percentage points, from 0.4% to 0.5%. That followed growth of 0.6% in the first quarter.
Reynolds said:
"The UK economy is showing resilience to the Middle East conflict with the fastest growth in the G7 and business investment up 5.2%."
She said the Government was seeking to create "good jobs and good growth in every postcode".
Business investment up 5.2% on a year earlier
Business investment rose by 1.8% in the second quarter and was 5.2% higher than in the same quarter of 2025. The increase was driven mainly by spending on buildings and structures, with smaller gains in ICT equipment, machinery and intellectual property.
Whole-economy investment, covering both private and public investment, rose by 0.9% in the quarter and was 3.1% higher than a year earlier.
ONS sees tentative improvement in investment intentions
The ONS said there were tentative signs companies were becoming more willing to invest, including renewed spending on infrastructure, automation and artificial intelligence.
It also cautioned that the wider business environment remained subdued, with uncertainty, higher costs and borrowing pressures still holding back investment in some sectors.
The same analysis said 28% of trading businesses reported lower turnover in August, while economic uncertainty remained the most commonly reported challenge. Concerns about energy costs, partly linked to the Middle East conflict, were also rising.
Growth revised up against end-2024
The revisions mean the economy is now estimated to be about 2.0% larger than in the final quarter of 2024, up from a previous estimate of 1.9%.
GDP per head rose by 0.4% in the second quarter and was 1.0% higher than a year earlier.
The figures incorporate updated data and methodological changes introduced through the 2026 Blue Book, the ONS's annual overhaul of the national accounts.
G7 comparison needs careful reading
Reynolds described the UK as having the fastest growth in the G7. Comparative international data broadly support the UK having been among the strongest-growing G7 economies over the first half of 2026, although cross-country comparisons can shift as other nations revise their own GDP estimates.
The investment picture is more mixed. While UK business investment has risen strongly over the past year, whole-economy investment remained the lowest in the G7 as a share of GDP, at 19.0% in the second quarter of 2026.
Reynolds links figures to reindustrialisation agenda
Reynolds presented the numbers as evidence the economy is holding up despite international instability and higher energy costs.
The Government has made reindustrialisation, private investment and spreading growth beyond London and the South East central to its economic agenda.
The latest ONS figures give ministers some encouraging headlines going into the autumn: growth has been revised up and business investment is 5.2% higher than a year ago. They also underline the challenge ahead, with wider business conditions subdued and Britain's overall investment rate still comparatively low.
