UK and US Growth Revised Higher as Diesel Prices Near £2 a Litre

The UK economy grew faster than previously estimated in the second quarter, with revised figures showing real GDP expanding by 0.5% quarter-on-quarter, up from an initial estimate of 0.4%, according to market commentary cited by the Guardian. The upgrade follows unrevised growth of 0.6% in the first quarter.

Analysts said the revision reinforces the UK's position as the fastest-growing economy among G7 nations for the first half of the year. Chris Beauchamp, chief market analyst at IG, was quoted saying the upgraded figure represents “yet more good news” for the prime minister, adding that strong relative growth could ease pressure for an early election.

The data also showed a shift in the composition of growth, with government spending contracting by 0.5% quarter-on-quarter — a steeper fall than the previously reported 0.3% decline — suggesting the economy has become less reliant on public spending to sustain expansion. One analyst noted that despite the impact of the Iran war, the economy proved stronger in the first half of the year than expected, and forecasts for annual GDP growth have been revised up to 1.4%.

Commentators cautioned that the outlook for the coming months looks more challenging, citing potential interest rate rises, a sharp increase in inflation, and a tax-raising budget as headwinds likely to weigh on growth over the winter.

Separately, diesel prices were reported to be approaching £2 a litre for the first time, a threshold that would add further pressure to household and business costs. Bakery chain Greggs also reported accelerating sales growth of 7.7% in the third quarter, which it attributed in part to more settled weather.