Can the chancellor claim the UK's economy is 'world leading'?published at 08:22 British Summer Time

08:22 BST

Faisal Islam
Economics editor

The chancellor has just made the “G7-leading” claim, this time on a slightly different basis.

The UK has definitively slipped from the top to the middle of the G7 table for Q2, falling behind the US and possibly Japan, which is yet to report.

But adding Q1’s better performance to Q2, is still very likely to see the UK as the fastest-growing economy in the G7 across the first half of the year. We await absolute confirmation after the figures from Japan and Canada are released.

On one level, these political boasts about growth league tables can all get a little tiresome.

But this has become the central metric by which the main political parties have sought to compare their economic performance internationally.

It is also hard-wired into the government’s original “missions”. And for good measure Canada’s PM Mark Carney has also promised it for his country. So, although it’s no longer true in Q2, the chancellor is likely to continue with a different version of the same claim.

Chancellor Rachel Reeves says today's figures "beat expectations" in the second quarter and the UK is the "fastest growing economy in the G7 for the first half of this year".

She says she recognises there is "still more to do" so people in all parts of the country benefit from growth, adding the numbers today are "encouraging" but they need to "build on that".

The government hasn't yet set a date for the autumn Budget, she says, but the "key focus" is to build on today's numbers.

Reeves welcomes "robust" growth from hospitality and retail, and says growth in construction reflects the government's focus on "getting Britain building again".

We're just a year into this government and there is more to do to get the economy "out of a rut", she says.

Let's hear what some economists are saying about this morning's figures now.

James Smith, economist at ING Bank, tells the BBC’s Today programme growth was always going to slow down in the second quarter.

“What we’ve got to remember is the first quarter was boosted by firms trying to get ahead of Donald Trump’s tariffs: big increase in exports, trying to get in before those tariffs came in.

"So we were always going to see that unwind, we also saw in the first quarter a lot of activity in the housing market before the stamp duty deadline in April, that stopped as well."

Fergus Jimenez-England, associate economist at the National Institute of Economic and Social Research says: "Despite this positive surprise, we expect growth to remain subdued in the third quarter of this year as uncertainty over fiscal policy and international trade continues to weigh on economic activity.

As outlined in our recent UK Economic Outlook, the Chancellor must build a substantial fiscal buffer in the Autumn Budget to avoid uncertainty plaguing growth into next year.

We've just been hearing from Education Secretary Bridget Phillipson over on BBC Breakfast, who tells the programme that the 0.3% figure is "slower and it's a lower figure than we would want", but says it's positive that the UK is seeing growth.

The government is not complacent, however, and wants to see "much more", she says, adding that there will be "a real focus" on growth and productivity at the Budget later this year.

"This government has stabilised the economy," she says, pointing to interest rate cuts, and says "we've seen more people in work" and inactivity falling, but reiterates "there's a lot more that we need to do".

Referencing her own ministerial portfolio, she says the government is focused on improving skills.

Digging a bit deeper into that quarterly figure of 0.3% growth - the information and communication sectors were the biggest contributor having increased by 2.0%, the ONS says.

Within that, the largest boost came from computer programming, consultancy and related activities, which grew by 4.1%.

On the other side, the largest negative contributor to growth in the second quarter was wholesale and retail trade repair of motor vehicles and motorcycles, which fell by 0.9%, the ONS said.

This was mainly because of a decline in wholesale trade, excluding motor vehicles and motorcycles, which fell by 2.4%.

We've been reporting the headline figure of 0.3% between April and June because quarterly figures are more significant.

But we also get a figure each month and June's showed the economy grew by 0.4%.

However that comes after the economy contracted by 0.3% in April, the steepest monthly decline since October 2023, and shrank by a further 0.1% in May.

ONS director of economic statistics Liz McKeown said: "Growth slowed in the second quarter after a strong start to the year.

"The economy was weak across April and May, with some activity having been brought forward to February and March ahead of stamp duty and tariff changes, but then recovered strongly in June.

"Across the second quarter as a whole, growth was led by services, with computer programming, health and vehicle leasing growing."

Image source, PA Media

In addition to reaction from the chancellor, we've also now heard from shadow chancellor Mel Stride.

He says “any economic growth is welcome", but accuses Rachel Reeves of "economic vandalism", pointing to "business leaders saying that all indicators are flashing red" and economists "warning that Rachel Reeves has created a £50bn black hole in the public finances".

Stride says that the government has seen "taxes hiked, inflation almost double, unemployment rise, and growth stagnate. Looming tax rises will only make things worse and working people will pay the price."

“Rachel Reeves is taxing your future to fund her failure," he says.

Image source, PA Media

We can now bring you reaction from Chancellor Rachel Reeves to the latest GDP figures.

She says today's economic figures are "positive" and that they show a "strong start to the year and continued growth in the second quarter".

"But there is more to do to deliver an economy that works for working people," Reeves says, adding that the economy has the "key ingredients" but "has felt stuck for too long".

“That is why we’re investing to rebuild our national infrastructure, cutting back on red tape to get Britain building again and boosting the national minimum wage to make work pay. There’s more to do and today’s figures only fuel my ambition," she says.

Here's how that headline figure of 0.3% growth for the second quarter of the year fits into how the UK economy has been faring over the last couple of years.

Last quarter saw 0.7% growth, so while today's figure is smaller than that and means the economy has slowed down, it hasn't stopped growing.

UK no longer fastest growing economy in G7published at 07:20 British Summer Time

07:20 BST

Faisal Islam
Economics editor

Today's marked slowing of the growth in the economy will stop the government from boasting that the economy is the fastest growing in the G7.

But it was expected to slow notably more, to near stagnation.

In the event, a robust June, driven by a strong performance in the all important service sector, suggests some of the pessimism was overdone.

This is still a slowdown on the first quarterpublished at 07:16 British Summer Time

07:16 BST

Dharshini David
Deputy economics editor

The government's number one mission is to grow the economy, but even though the figures for the second quarter will be a relief for the chancellor, being better than expected, there’s still been a slowdown compared to the first quarter.

And taking account of population growth, GDP expanded by a modest 0.2% per person over the second quarter. While much of the service sector performed well, there was disappointment for the retail sector, which has grappled with cautious household spending and higher taxes.

And the still-modest growth over the last quarter as a whole is a reminder that our performance across recent years has been underpowered- something the chancellor has said she’ll be looking at tackling again, come the autumn Budget

Growth in the latest quarter was driven by increases of 0.4% in services and 1.2% in construction, while the production sector fell by 0.3%, the ONS release says.

Other factors are that some activity was brought forward to February and March ahead of changes to stamp duty in April and announced US tariff changes.

Jennifer Meierhans
Business reporter

That's a better figure than economists had expected but it means economic growth had slowed from 0.7% the first three months of the year to 0.3% in the second quarter.

The UK economy grew by 0.3% between April and June, official figures show.

The figure to look out for this morning is whether the UK economy has grown in the second quarter of the year - from April to June - compared to the first quarter - January to March.

The analysts at Capital Economics are forecasting a 0.1% rise in GDP, pointing to better retail and car sales in June.

But, they say, "while the economy may be past the worst, it’s hard to envisage GDP picking up strongly anytime soon."

Harry Farley
Political correspondent

Image source, PA Media

Today’s figures cover the end of Rachel Reeves’ first year in charge of the economy.

In that time she has repeatedly said her “number one aim” is to “kickstart economic growth”. So how’s that going? This data will give us a snapshot. If – as expected – growth has slowed, the political pressure on her will only grow.

Writing in the Guardian newspaper Reeves anticipates the expected criticism. She argues she is taking steps to break a “cycle of low growth” under the Conservatives.

“Britain’s economy is not broken, but I know that in recent years it has got stuck,” she writes.

The problem for Reeves is time. Labour MPs I speak worry many of the measures she is taking – like reform to planning rules and investment in skills training – won’t have had an impact by the time of the next election.

More immediately, the assumption in Westminster is she will increase taxes in the autumn Budget. Today’s economic figures matter for how much she will have to raise.

Dharshini David
Deputy economics editor

Image source, Get

The government's number one mission is to grow the economy, but that growth may have been in short supply in the second quarter.

The economy is expected to have grown by just 0.1% - a marked slowdown from the 0.7% in the first three months of the year.

That partly reflects distortions caused by President Trump's tariffs announcement in April. A rush by exporters to beat those levies prompted a surge in goods sold to the US in the first few months of the year. But, that is likely to have fallen back since, depressing growth.

Business surveys and economists also suggest that the government’s own measures - higher taxes and minimum wages for example - have been squeezing businesses and hitting job creation.

And, even though incomes for workers are typically outpacing inflation, consumers have been quite cautious.

The challenge for the Chancellor is how to rebuild confidence among businesses and households - ahead of what many fear will be another tax-raising budget - to try to kickstart growth once again.

Many economists and politicians are concerned that the UK economy is not growing fast enough.

When the Labour government took power in July 2024, it made growth its top priority.

The economy had fallen into recession at the end of 2023 but rebounded in the first half of 2024. Since then, growth has been sluggish.

Although the economy grew by 0.7% in the first quarter of 2025, it contracted by 0.3% in April - the steepest monthly decline since October 2023 - and shrank by a further 0.1% in May.

The strength of the economy affects things like pay increases for workers and the amount of tax the government can raise to pay for services.

The figures due to be published today are for the country's GDP - or Gross Domestic Product.

It's a way of measuring all the economic activities of companies, governments, and people in a country.

In the UK, new GDP figures are published every month by the Office for National Statistics (ONS).

The ONS measures GDP by taking into account the UK's output, its expenditure, and its income, but this can sometimes hide important details on important aspects of living standards like inequality and living standards.

Most economists, politicians, and businesses like to see GDP growing steadily - because it means people are spending more, more jobs are being created and more tax is being paid.

But last month figures showed GDP had contracted by 0.1% in May, following a 0.3% contraction in April - meaning the economy is shrinking.

If GDP falls for two quarters in a row, this is known as a recession, which can lead to pay freezes and job losses.

• We've got more on how GDP is measured, and how it might affect you, in our explainer piece

Jen Meierhans
Business reporter

Good morning from the London newsroom.

At 07:00 BST, we'll find out if the economy grew or shrank in the second quarter of this year - from April to June.

Although the economy grew by 0.7% at the start of this year - better than many had expected - some economists are predicting only a slight increase this time around.

We’ll bring you the latest figures when they're published, as well as analysis on what this means - for the government, the economy and you.