“The UK economy confounded expectations in July, with warm weather and a World Cup boost helping key sectors seemingly shrug off a steep rise in energy bills and deliver stronger-than-expected growth, particularly across services.
“July’s strong showing is likely to mark the high-water mark for growth in Q3, with higher energy bills and pre-Budget tax uncertainty expected to weigh on household spending and economic activity through August and September.
“If the UK economy does start to falter, the Chancellor could be left with a Budget headache, as more muted growth and surging borrowing costs erode his fiscal headroom, raising the prospect of further tax rises.
“While these figures may strengthen the hawkish mood among rate-setters, a September rate rise still looks unlikely as most policymakers remain hopeful that a sluggish economy will ultimately help bring inflation under control, despite escalating US-Iran tensions.”
ENDS
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* includes parent companies. Source: ICAEW member data March 2026, Interbrand, Best Global Brands 2025.
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