UK macro economy ‘barely bigger’ than beforehand thought after Q2 development revised up; Greggs proposes 740 job cuts – industry reside | Business
Introduction: UK macro economy greater than first thought after GDP revised greater
Good morning, and welcome to our rolling protection of industry, the monetary bourses and the global community macro economy.
The UK macro economy grew quicker than first estimated within the second quarter of the 12 months, regardless of the disruption attributable to the Iran conflict.
UK development in April-June has been revised to 0.5%, up from the earlier estimate of 0.4%, within the newest National Accounts.
That’s a welcome piece of excellent information for chancellor John Healey, as he attracts up the price range due in 4 weeks’ time, and means his predecessor Rachel Reeves handed over a barely bigger macro economy than beforehand recognised.
Growth in Q2 2026 was pushed by the companies sector (the place exercise elevated by 0.6%) and the development sector (which grew by 0.8%), whereas the manufacturing sector shrank by 0.1%.
However…the Office for National Statistics, which publishes the information, has additionally revised down its estimate for development in 2025.
ONS director of financial statistics Liz McKeown stated:
“Today’s figures embody our annual enhancements to the measurement of the macro economy, incorporating new data that gives a greater image of exercise throughout the UK’s service sector, alongside the standard inclusion of up to date and improved information sources.
“Growth for 2025 as an entire was just a little decrease than beforehand estimated, with the profile of development throughout the quarters additionally revised.
“However, stronger companies development within the newest quarter means the macro economy is now barely bigger than beforehand estimated.”
The agenda
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7am BST: UK nationwide accounts for April-June 2026
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7.45am BST: French inflation report for September
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10:30am BST: BoE Financial Policy Committee minutes
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1.30pm BST: US PCE inflation index for August
Key occasions
Over in France, inflation has jumped this month.
Statistics physique INSEE has estimated that the Consumer Price Index (CPI) ought to rise by 3.0% year-on-year in September, up from a 2.4% rise in August.
INSEE predicts that vitality costs accelerated once more, pushed by these of petroleum merchandise and gasoline.
Services inflation most likely elevated barely thos month, whereas meals costs are forecast to have accelerated, particularly for recent merchandise.
On an EU-harmonised foundation, French inflation jumped to three.4% this month, the quickest tempo in additional than two years.
In one other increase for the UK macro economy, Allianz Trade has upgraded its development forecast for this 12 months by 0.3 share factors to 1.3%.
In its newest Global Economic Outlook report, the overseas insurance coverage firm explains that the UK macro economy has carried out higher than anticipated in 2026.
Allianz Trade says:
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UK industry insolvencies have fallen 5%, bucking a 6% international rise and will increase of 19% within the US, 7% in Germany and Japan, and 5% in France.
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Consumer spending and industry financial backing have remained resilient, whereas manufacturing has rebounded and aerospace continues to energy forward.
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Households have sustained spending by decreasing their financial savings fee, elevating questions over how lengthy that resilience can final.
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UK inflation is forecast to succeed in 3.4% in This fall 2026, as greater utility payments and enter prices feed via to client costs.
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The Bank of England is predicted to lift charges twice earlier than year-end, taking Bank Rate from 3.75% to 4.25%.
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Rate cuts will not be anticipated to start till November 2027, with greater borrowing prices set to weigh on financial backing, housing and development.
Zoopla: House gross sales down 9% in September
Higher borrowing prices harm demand for houses in September, the property portal Zoopla has reported this morning.
Zoopla discovered that the variety of gross sales being agreed this month fell by 9% in contrast with September 2025.
The drop in gross sales got here regardless of the variety of houses in the marketplace rising by 5% 12 months on 12 months, with the hole between provide and demand most acute in London and southern England.
Annual home value development has additionally slowed to 0.8%, the bottom degree since July 2024, in keeping with the newest Zoopla House Price Index. The common value of a UK house is now £273,000, it stated.
GDP improve is ‘increase to Burnham’ however winter slowdown looms
This morning’s improve to UK development in April-June is a lift to Andy Burnham, analysts say, though he didn’t take workplace till virtually a month later.
Chris Beauchamp, chief market analyst at IG, says:
“Still on a post-speech excessive, the upgraded determine is but extra excellent news for the UK’s still-new(ish) prime minister.
The highest growth in the G7 for the first half is definitely a headline and one that can assist maintain nervous MPs in line for some time, plus it helps take off strain for a brand new election – why danger it now when issues look like bettering properly.”
Ashley Webb, senior UK economist at Capital Economics, warns although that development could sluggish in the direction of the tip of this 12 months:
The upward revision to actual GDP development in Q2, from 0.4% q/q to 0.5% q/q, means that the macro economy has been a bit extra resilient to greater vitality costs within the first half of the 12 months than beforehand thought. This resilience could proceed into Q3, however we nonetheless count on it to fade in This fall as greater inflation takes a much bigger chew out of households’ actual incomes.
The 0.5% q/q acquire in Q2 actual GDP adopted unrevised development of 0.6% q/q in Q1, with the breakdown nonetheless displaying that the macro economy is now not being closely supported by authorities spending, which contracted by 0.5% q/q (revised down from -0.3%).
Thomas Pugh, chief economist at audit, tax and consulting agency RSM UK, agrees that development will sluggish over the winter:
“The upward revisions to Q2 GDP development means the macro economy was even stronger within the first half of the 12 months than we beforehand anticipated, regardless of the Iran conflict. What’s extra, the composition of development appears just a little more healthy. Surveys counsel that a lot of that constructive momentum has been carried ahead into Q3 that means we’ve got revised up our annual GDP forecast to 1.4%.
“However, the following six months appears harder with potential rate of interest rises, a pointy enhance in inflation and one other tax elevating price range all to come back. That will drag closely on development over the winter.
Greggs shares bounce
Shares in Greggs have jumped by 7.5% in the beginning of buying and selling after it introduced a pick-up in gross sales, and plans to chop 740 jobs.
Investors are cheered that Greggs now expects “a modestly improved final result for 2026”.
Aarin Chiekrie, fairness analyst at Hargreaves Lansdown, says:
“Greggs served up a tasty buying and selling replace, with whole gross sales development accelerating to 7.7% over the third quarter.
This was pushed by extra settled climate in current months, alongside ongoing menu growth and product innovation. New retailer openings additionally performed their half, with the group on observe for 100-110 web openings this 12 months, excluding 12 Express places, making it simpler for extra clients to tuck into their freshly baked items.
Alongside value inflation remaining at a manageable degree of round 2%, the full-year outlook has modestly improved from prior steering, which had pointed to working income of round £188mn.
Encouragingly, the UK’s exports in April-June have been a lot stronger than first estimated.
Today’s nationwide accounts present that export volumes elevated by 2.8% within the quarter, revised up from the primary estimate of a 0.5% rise.
UK cements place as fastest-growing G7 nation this 12 months
This morning’s development improve underlines the UK’s standing because the fastest-growing G7 macro economy within the first half of 2026.
Growth of 0.6% in Q1, and 0.5% in Q2, put the UK forward of different superior economies this 12 months – though on an annual foundation Britain shares third place with Japan:
Greggs proposes 740 job cuts
UK bakery chain Greggs has introduced plans to chop greater than 700 jobs, regardless of a pick-up in gross sales.
Greggs is proposing closing 4 of its manufacturing websites, which may result in as much as 740 roles turning into redundant.
Greggs warns that with indicators of higher inflationary pressures in 2027, it wants to chop prices to stay aggressive.
It says:
We consider such modifications, while tough, are needed to make sure Greggs continues to fulfill capability necessities for development within the years forward in probably the most cost-efficient method. Our quick precedence is to minimise the impression on our folks the place doable. We will enter right into a session interval shortly to work with commerce unions and worker representatives of these affected to refine and develop these proposals.
The proposals may value £60m, however then save £20m a 12 months.
Greggs additionally reported 7.7% gross sales development within the third quarter of the 12 months, which it attributes to “continued menu innovation” and extra settled climate. Those menu modifications contains its new Steak & Stilton Bake, and relauched salads.
Energy payments in Great Britain forecast to leap by £276 a 12 months from January
Jillian Ambrose
Household vitality payments in Great Britain are predicted to soar by £276 a 12 months for the everyday family from January because the impression of the Middle East conflict continues via the coldest months of winter.
The authorities’s cap on vitality costs is poised to leap by 16% to the equal of £1,999 for the common annual dual-fuel invoice in an additional blow to struggling households, in keeping with figures from the main forecaster Cornwall Insight.
The enhance for the January to March quarter is nicely above the consultancy’s earlier prediction of a 9% rise, with analysts blaming the uptick on the current rise in gasoline market costs to three-year highs.
It would take the cap to its highest degree for 4 years.
UK industry financial backing jumps as ‘AI-driven wave’ arrives
The AI growth could have pushed UK industry financial backing up within the April-June quarter.
The ONS experiences that industry financial backing is estimated to have elevated by 1.8% within the quarter, and was 5.2% greater than a 12 months in the past.
Gross mounted capital formation (which measures the acquisition of mounted belongings by companies, governments, and households) rose by 0.9% in Q2; the primary drivers of the expansion are “will increase in different buildings and constructions”, which would come with information centres.
Martin Beck, chief economist at WPI Strategy, says:
“Consumer spending development remained on the earlier estimate of 0.3%, however industry financial backing development was revised as much as 1.8%. That gives at the least some proof that the UK could also be beginning to catch the AI-driven financial backing wave very seen within the US.”
Britons additionally put more cash apart for a wet day in April-June.
The family saving ratio elevated by 0.2 share factors to eight.8% in Quarter 2 2026, pushed by an increase within the contribution of non-pension saving, the ONS says.
UK dwelling requirements picked up in April-June
An necessary measure of dwelling requirements jumped within the second quarter of this 12 months, at the moment’s nationwide accounts present.
Real family disposable revenue per head elevated by 1.0% in April-June, following a lower of 0.8% in January-March.
That means folks had more cash left to spend, save, or make investments after taxes and deductions, adjusted for inflation.
Introduction: UK macro economy greater than first thought after GDP revised greater
Good morning, and welcome to our rolling protection of industry, the monetary bourses and the global community macro economy.
The UK macro economy grew quicker than first estimated within the second quarter of the 12 months, regardless of the disruption attributable to the Iran conflict.
UK development in April-June has been revised to 0.5%, up from the earlier estimate of 0.4%, within the newest National Accounts.
That’s a welcome piece of excellent information for chancellor John Healey, as he attracts up the price range due in 4 weeks’ time, and means his predecessor Rachel Reeves handed over a barely bigger macro economy than beforehand recognised.
Growth in Q2 2026 was pushed by the companies sector (the place exercise elevated by 0.6%) and the development sector (which grew by 0.8%), whereas the manufacturing sector shrank by 0.1%.
However…the Office for National Statistics, which publishes the information, has additionally revised down its estimate for development in 2025.
ONS director of financial statistics Liz McKeown stated:
“Today’s figures embody our annual enhancements to the measurement of the macro economy, incorporating new data that gives a greater image of exercise throughout the UK’s service sector, alongside the standard inclusion of up to date and improved information sources.
“Growth for 2025 as an entire was just a little decrease than beforehand estimated, with the profile of development throughout the quarters additionally revised.
“However, stronger companies development within the newest quarter means the macro economy is now barely bigger than beforehand estimated.”
The agenda
-
7am BST: UK nationwide accounts for April-June 2026
-
7.45am BST: French inflation report for September
-
10:30am BST: BoE Financial Policy Committee minutes
-
1.30pm BST: US PCE inflation index for August
