The UK economy is expected to have recorded another quarter of growth as businesses find ways to cope with the fallout of the Iran war, but some industries are coming under increasing pressure, economists think.

Figures from the Office for National Statistics being published on Thursday are set to show a degree of resilience in the economy in the face of supply chain issues and price pressures linked to the conflict, as well as a period of political uncertainty.

Some economists think gross domestic product (GDP) will have increased 0.4% for the second quarter, between April and June.

This would mean the economy has continued growing after a 0.6% rise in GDPfor the first three months of 2026.

Rob Wood, chief UK economist for Pantheon Macroeconomics, said this would show “the big picture is that the economy has remained resilient to the hit from the war in Iran”.

It comes as the services sector – the most dominant in the UK economy – strengthened in May, largely coming from professional services and scientific research and development.

Furthermore, recent data has pointed to factories and manufacturing firms stockpiling in anticipation of supply shortages and price rises, which has helped keep growth elevated.

But a weaker picture may be emerging from June as the heatwaves bring mixed results for businesses and some industries come under increasing pressure, economists said.

Mr Wood is expecting monthly GDP to dip by 0.1% in June, “reversing the 0.1% gain in May, as a sharp fall in construction activity drags on growth, while services and industrial production stagnate”.

England reaching the World Cup semi-finals is expected to have helped boost spending in July (Bradley Collyer/PA) (PA Wire)

Thomas Pugh, chief economist for RSM UK, said he was expecting the services industry to have been dragged down by a fall in hospitality activity, despite the Fifa World Cup kicking off in June.

Mr Pugh said its own business surveys suggest “consumers were likely switching away from restaurants towards pubs to watch the World Cup, rather than increasing the total amount of spending”.

But he added: “There could still be a boost to activity in July, given the scorching weather and England reaching the semi-finals.”

Mr Pugh has a slightly more positive outlook for June, forecasting monthly GDP to have risen by 0.1%.

“All told, we expect GDP to nudge up in June, helped by a big jump in erratic mining activity,” he said.

“That will be enough to deliver 0.4% growth for Q2 (the second quarter), as strong momentum from Q1 (the first quarter) and consumers smoothing through higher inflation helped to support solid growth.”

I can't get through the paywall, but looks as if Google's AI Overview can?! Google's summary pasted below.

The Shift to Gilts

According to analysis by The Times, UK government bonds (gilts) are significantly benefiting from turbulent financial shifts in rival global economies: [1, 2]

• US and Japan Volatility: Investor anxieties regarding the leadership of the US Federal Reserve under Kevin Warsh, combined with Japan’s highly expansionary fiscal environments, have unsettled foreign markets. [1]
• The Safe Haven Effect: Seeking stability, global investors are choosing British debt, causing gilt yields to drop. Financial analysts at TS Lombard have advised investors to "double down on gilts" relative to peers in Germany, Japan, and the US. [1]
• Domestic Factors: The UK's lower-than-expected inflation readings have further stabilized the market, signaling to investors that a series of interest rate cuts from the Bank of England may be on the horizon. [, 2]

Why This Matters for the Burnham Administration

This market pivot offers a massive stroke of luck for Prime Minister Andy Burnham and his Chancellor, John Healey, ahead of their critical autumn budget on October 28. [1]

A single percentage point drop in the ten-year gilt yield reduces the government's interest bill by £12 billion to £15 billion. This newfound market confidence grants the Treasury essential "fiscal breathing room" to navigate ambitious policy choices and planned spending rules without triggering a sudden financial backlash.

Britain’s wine industry is maturing beautifully, with international acclaim and growing exports

I know we’re long past the point of treating quality wine in Britain as a novelty. It’s decades now, after all, since the first wave of serious English sparkling winemakers – names such as Nyetimber, Ridgeview and Breaky Bottom in East Sussex, and Camel Valley in Cornwall – invited the first comparisons with Champagne. And with more than 1,100 commercial vineyards now planted, covering just under 5,000 hectares between them, neat geometric rows of vines following the gentle slopes of rolling hills has become a familiar, entirely unremarkable feature of the British landscape, especially in southern England.

For anyone who started getting into wine before the domestic scene began to really gather momentum in the 2000s, however, certain things about the development will always be surprising. For this Essex native, for example, hearing serious wine people from all over the world apply that most glamorous of French agricultural words, “terroir”, with an entirely straight face, to the stretch of mundane countryside where I grew up will never get old. There’s a kind of “through-the-looking-glass” uncanniness about a French wine producer treating the Crouch Valley with the kind of respect and reverence people like me reserve for Burgundy’s hallowed Côte d’Or, or a Californian intoning “near Chelmsford” as if it were the San Francisco to Crouch Valley’s Sonoma.

>For this Essex native, hearing serious wine people apply that most glamorous word, ‘terroir’, to the stretch of countryside where I grew up, will never get old

Such moments are getting more common, as foreign interest in British wine grows increasingly serious. According to Wine GB, nearly one in every 10 bottles (9%) of wine produced in the UK is now sold overseas, which, while still rather small in the global context, is nonetheless an impressive jump from the 4% it was five years ago. More striking is the arrival of foreign investors and winemaking talent. Ten years ago, all the talk was of Champagne houses, such as Taittinger and Pommery, investing in the chalky English downloads as a cool-climate hedge for a future when their home region would become too warm to offer the verve and freshness that had made it famous. Other big sparkling names lured from around the world include South Africa’s Graham Beck, whose debut English cuvee was launched this year, and the German group Henkell-Freixenet, which owns Bolney near Haywards Heath in East Sussex.

More recently, however, it’s been the potential for pinot noir and chardonnay on the London clay soils of the Crouch Valley that has been making the biggest buzz, with winemakers from Burgundy (Marianne Duroché and Alex Moreau) and California (Jackson Family Estates) arriving in Essex.

Their interest is easy to understand once you’ve tasted the quality of wines being made there, such as the impossibly graceful Danbury Ridge Pinot Noir 2023 (£40, thewinesociety.com) from a producer who planted their first vines in Danbury in 2014; or my most recent, summer-ready favourite, The Heretics Disobedient Pale Rosé (£32, wearetheheretics.com), a gloriously fine-textured, gastronomic pale pink pinot that is as good as any rosé I’ve tried so far this year.

Other English wines to look out for amid the wave of promotions and events lined up for the industry’s annual celebration-cum-promotional jamboree, English Wine Week, later this month, include still wines such as the summery floral scents and gooseberry fool flavours of Marks & Spencer English Lily White, Surrey 2025 (£10.25), the cut-grass-and-elderflowers of Chapel Down Bacchus, Kent 2024 (£16, or £15 as part of a mixed case of six bottles, majestic.co.uk), and the taut petit-chablis-esque Simpsons Estate Chardonnay, Kent 2025 (£13.50, reduced from £17.50 until June 23, Waitrose).

For sparkling wine, meanwhile, I enjoyed the ripe red apple succulence of Lovington English Sparkling Wine NV (£22, The Coop) made for The Coop by Louis Pommery and the gorgeously pure, graceful, chalk-textured second edition of Taittinger’s “Kentish Champagne”, Domaine Evremond Classic Cuvée Edition II NV (£55, domaineevremond.com. But the luminous depth of flavour and grace of texture of the wines made at Dorset’s Langham Estate, including their Blanc de Blancs NV (£44, thewinesociety.com), means they are still, for me, the fairest English fizzes of all.

• Government to open almost 180 Dutch-style Youth Hubs over next two years to tackle rising youth unemployment as nation’s NEETnumber hits one million 
• Visting the Netherlands, the Work and Pensions Secretary saw how Dutch ‘Jongerenpunt’ youth points are bringing services under one roof, helping them record Europe’s lowest NEET rate  
• Secretary of State vows to learn from the Netherlands’ approach where young people are given multiple chances through work-study pathways, employer partnerships and apprenticeships to build a system where “inactivity is a last resort”

Young Brits are set to benefit from Dutch style employment support as the Government steps up localised support to tackle rising NEET numbers. 

Almost 180 new Youth Hubs will begin opening from next week which will provide wraparound services – coordinating education, welfare, and employment support. This comes after the government implemented a standard blueprint for Youth Hubs last year as part of the expansion programme, designed to ensure hubs include essential wraparound services such as health, housing and wellbeing support, with consideration given to international models and UK evidence, while reflecting local needs and partnerships. 

Work and Pensions Secretary Pat McFadden visited one of these youth points in Rotterdam and spoke to employers and educators about the transformational impact they have for Dutch youngsters. 

The Netherlands has one of the world’s lowest NEET rates - 4.9 percent among 18 to 24-year-olds, compared to the UK’s 15.1 percent. 

Britain’s new Youth Hubs will bring vital support to young people where they already are at a range settings including football clubs, community centres and libraries. The hubs, like the Jongerenpunt services in the Netherlands, are one stop shops where young people can access the support they need – whether it’s CV advice, housing support or mental health support they need. Every local area across Britain will now get a Youth Hub, with 360 youth hubs to be opened by 2029. 

Youth points are a key part of the Netherlands’ system, alongside their strong track record of vocational training. Around 35 percent of young people in the Netherlands pursue technical and professional pathways compared with 22 percent in the UK. More than half of Dutch young people have workplace experience by the age of 19, compared to dwindling early labour market participation in the UK.  

During his visit the Secretary of State heard more about the Netherlands’ strong emphasis on early intervention, local accountability and active engagement. Young people who leave education without qualifications continue to receive support, while local authorities, employers, schools and employment services work together to prevent long-term inactivity. He vowed to build a system in the UK where there is a “path for everyone”.  

The Netherlands’ success comes despite the fact Dutch young people rank second in the world for depressive symptoms – directly behind the UK and report anxiety disorders at rates slightly below Britain’s. If the UK were to match the Dutch NEET rate, 600,000 more young people would be in work or education today according to the Resolution Foundation.  

This strongly suggests the difference is not health but how the country responds to it, with the Dutch system keeping people connected to work before it is too late.

Work and Pensions Secretary Pat McFadden said:

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This comes as over a million 16-24-year-olds are not in education, employment or training, with the number rising by almost 250,000 since 2021 with more than half reporting a health condition.

These figures underline the need for targeted action which is why the Government is delivering a major youth employment drive backed by £2.5 billion over the next three years which will support almost one million young people and help deliver up to 500,000 opportunities to earn and learn. This includes enhanced apprenticeship support, helping more young people into work while giving businesses greater incentives to hire and train those who have been on Universal Credit and looking for work for six months.

We have also introduced a £2,000 incentive for each new employee aged 16-24 taken on by a small business, while National Insurance Contributions are waived for most employees under 21 and apprentices under 25.

This existing support, combined with learnings from the Secretary of State’s visit to the Netherlands are essential to the government’s mission to get Britain’s young people into good, productive jobs which will drive the nation’s plan for growth.

AMD is to invest up to £2bn over the next five years in the UK to accelerate AI innovation and research and expand access to the compute resources needed for long-term economic growth and scientific leadership.

Speaking at London Tech Week, AMD’s chair and CEO Dr. Lisa Su outlined a series of investments and strategic collaborations designed to help accelerate the UK’s AI ecosystem and broaden access to the advanced computing that underpins scientific discovery and public-sector innovation. 

The initiative aligns with the UK’s AI opportunities action plan and AI hardware strategy, supporting broader national priorities to build world-class AI infrastructure, develop technical talent and accelerate AI adoption.

“The United Kingdom has the talent, research excellence and ambition to help lead the next era of AI,” said Su. 

“AMD is proud to deepen our commitment to the UK and work with partners across government, academia and industry to expand access to the compute infrastructure needed to advance sovereign AI, accelerate discovery and drive long-term economic growth.”

The announcement was welcomed by UK government leaders as a significant step toward strengthening the country’s AI infrastructure, research ecosystem and long-term economic competitiveness.

“This investment is a major vote of confidence in Britain’s place as a global AI superpower. We’ve got the talent, the world-class universities and the ambition to lead, and partnerships like this help turn that potential into real progress,” said chancellor Rachel Reeves. 

“It will drive more cutting-edge research here in the UK, open up opportunities for people to build the skills they need for the jobs of the future, and speed up breakthroughs that can improve people’s lives and grow our economy.”

Building on its recently announced work with Oxford Quantum Circuits (OQC) and JPMorganChase, AMD also announced a collaboration with Imperial College London to advance computational science and supporting research that relies on large-scale computing resources, including healthcare innovation and climate modeling.

London, Oxford and Cambridge are among the 10 most vibrant tech centres in the world, according to a closely watched study which found that Singapore had leapfrogged both Zurich and London to clinch top spot.

The two university towns both climbed up the rankings of Z/Yen’s Smart Centres Index,making Britain the only country to boast three different tech clusters in the world’s top 10 smartest cities. The biannual study, which assesses towns and cities ability to create, develop and deploy world-leading technology, ranked Singapore as the world’s smartest city for the time in the study’s history.

The east Asian city-state boasts a glut of high-skilled tech talent and is home to fast-growing juggernauts like ‘superapp’ Grab, and the Alibaba-backed e-commerce platform, Lazada. New York also rose sharply up the rankings, climbing four places from the previous poll conducted in December, while London slipped one place into third to round off the top three.

Tech talent powers Oxford and Cambridge up rankings

But authors said that a Southeast cluster that included Cambridge and Oxford together with the capital would more than likely have topped the rankings, in a sign of Britain’s increasing heft on the international tech stage.

Oxford climbed above tech-utopia San Fancisco – home to Silicon Valley – for the first time in 13 Smart Centres rankings, buoyed by the number of fast-growing spin-offs emerging from its historic university. 

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Both it and Cambridge have produced a wave of increasingly valuable start-ups and scale-ups in recent years, including quantum computing industry leader Oxford Ionics and Bicycle Therapeutics, a pioneering life sciences firm. 

The government has made facilitating the two towns’ success as economic hubs in their own right a linchpin of its bid to revive economic growth in Britain, and has pushed through plans for a train line connecting the two universities. 

The proposals, which will be further bolstered by a government-endorsed housebuilding programme, could add up to £78bn to the British economy, ministers have said.

London fell into third place despite a wave of fresh investment into the so-called Knowledge Quarter hub in King’s Cross from some of the world’s largest and fastest-growing tech firms in the past six months. The north London neighbourhood has become Europe’s principal hub for artificial intelligence-based companies, with Antrhopic, OpenAI and Google all expanding heavily in the area. It has also long been the home to some of Britain’s most vibrant start-ups, including Wayve, Alphatbet-owned Deepmind and the AI video lab Synthesia.

Professor Michael Mainelli, a former Lord Mayor of London and chairman of Z/Yen, said: “Centres with a deep commitment to skills development continue to perform well. 

“The competition to lead the way in the application of science and technology continues to drive development in the world’s commercial centres.”

After a dismal few years, things are looking up for Britain’s financial-services sector

Nearly ten years ago, soon after Britons had voted to leave the European Union, the boss of the London Stock Exchange outlined the catastrophe threatening their country’s financial-services industry. If Brexit cost the City of London its licence to clear trades in euro-denominated securities, said Xavier Rolet, “a very minimum” of 100,000 jobs might be at risk. At an appearance in 2017 before Parliament’s Treasury Select Committee, Mr Rolet raised his estimate to 232,000. Britain then had 1.1m people in financial-services jobs, or 3.5% of the workforce, producing 7% of its economic output and generating 11% of tax revenues.

Happily, the disaster never arrived. The industry still employs 1.1m people, who now account for 8% of the economy, or £224bn ($300bn) a year. That is 20% more, in real terms, than when Mr Rolet issued his warning. And the City in particular has prospered. The EU decided not to take an axe to Europe’s financial plumbing after all. Within the Square Mile that bounds London’s historic financial centre, 225,000 people worked in finance in 2024. This was 36,000 more than in 2019, despite the one-two punch of Brexit and the covid-19 pandemic. Another 181,000 worked in auxiliary fields such as law and accountancy, up by 51,000 over the same period.

Numbers matter in London’s financial district; the sense that its buzz is back matters more. Elbow your way through crowds of gilet-enthusiasts clutching pints on a spring evening, and previous fears that working from home would turn the City into a ghost town seem laughable. Plenty more prop up bars in Canary Wharf and the West End—the Square Mile’s spiritual extensions. They are not just there for the nightlife (though it helps, especially for bankers who might otherwise have been relegated to Frankfurt). For the first time in years financiers are also buzzing about London as a place to do business.

Since 2007 Z/Yen, a City think-tank, has maintained widely watched indices of the competitiveness of global financial centres. Whereas London and New York once vied for the top spot (see chart 1), London fell to a distant second place in 2020. It now rivals the Big Apple once more. The recovery, says Z/Yen’s Mike Wardle, has been driven less by quantitative factors than by improving sentiment among those responding to its survey. As the boss of a big asset manager, headquartered in America, puts it, “Half of my staff want to move to London.”

It has not been easy. Though Brexit was not the cataclysm some feared, it and other shifts have hurt the City’s standing. A world which once banked in London now has plenty of other hubs to turn to, from the Asian stalwarts (Hong Kong, Singapore and Tokyo) to upstarts such as Beijing, Dubai and Shanghai. That is more of a problem for the City than for Wall Street. New York owes its clout to its vast, economically vibrant hinterland; London’s used to come from being the financial capital of the world outside America.

Hard times

Brexit called into question whether it even remains the financial capital of Europe. However, those worries were overblown. True, continental hubs have muscled in on some of the City’s business lines. After the Brexit vote, Amsterdam quickly overtook it as Europe’s share-trading venue of choice. The hottest stock exchange for firms seeking fresh equity capital is in Stockholm. And big investment banks have been building new trading floors in Paris.

But that has not been enough to move the centre of gravity from London. Goldman Sachs and Morgan Stanley have kept their European headquarters there, and JPMorgan Chase is designing a new, bigger one. London is still the capital of cross-border finance in key areas. New Financial, another think-tank, has collected data on Britain’s share of global activity in 12 areas of international finance, comparing the average over the three years to 2025 with that over the three years to 2020 (see chart 2). In seven of these the City has remained the world’s premier financial centre.

As a trading venue for currencies, insurance and derivatives it is unrivalled. Britain’s former position at the hub of a vast empire keen on trade made London a natural home for the international currency market. It still benefits from the network effects this brought: foreign-exchange is more efficient if much of it is executed through one venue. London’s time zone—ideal for buying assets from Asia in the morning, then offloading them to America in the afternoon—helps, too.

Business at Lloyd’s of London, the world’s best-known insurance marketplace, is booming; over the past five years, the City’s share of the market for specialty insurance has risen from 42% to 45%. Half of global trade in interest-rate derivatives (which involve some of the most fiendish maths in finance) is executed in London, as is 38% of that in foreign-exchange derivatives. This relies on a network of boffins and financial plumbing that would be hard to replicate elsewhere.

The City’s record as a capital of capital, however, is more mixed. It is still home to more foreign bank assets, cross-border bank claims and international debt issuance than anywhere else. But the share of global assets overseen by British investment managers has fallen from 13% five years ago to 10%. And whereas the London Stock Exchange was once the venue of choice for international listings, it now hosts barely any: just 1.2% of the global total in the three years to 2025.

This fading allure is often linked to Britain’s failure to nurture and retain corporate titans. Such superstar firms certainly draw investors towards American markets, but the City’s bigger problem is that its stockmarket no longer attracts giants from elsewhere in the world. “When I think of the competition going forward, I don’t look west—I look east,” says Richard Oldfield, boss of Schroders, a big British asset manager. “Hong Kong is clearly winning the race [for international listings].”

And in driving domestic growth, the Square Mile has always underperformed. William Wright, New Financial’s founder, says it is now worse at this than it used to be. His team has examined Britain’s share of global activity in 14 areas of finance linked to the domestic economy, from homegrown equity listings and debt-issuance volumes to assets held by banks, insurers and pension schemes (see chart 3). The City comes top in none of these areas—and over the past five years has seen its share of global activity shrink in all but three. Only in venture-capital investment and issuance of leveraged loans and ESG corporate bonds has it raised its share.

Why, then, do so many financiers think things are looking up for London? One reason is that Brexit looms less large over firms’ decision-making (in a sign of this, Bloomberg reported this week that JPMorgan is transferring some roles from Paris to London). Another is that politicians and regulators are moving policy in the right direction. In private, many praise the Treasury’s continued push to get pension funds to invest more in risky assets, particularly unlisted ones, despite the change of government in 2024.

Rule changes to simplify listing shares in London also survived the switch. “I think a lot of companies don’t realise yet how much more attractive our listing regime has become,” says Steven Fine, boss of Peel Hunt, a British investment bank. This may help keep domestic listings in Britain. City bigwigs also praise the seriousness with which regulators have embraced objectives, under the Financial Services and Markets Act in 2023, to promote growth and international competitiveness.

A tale of two cities

The Square Mile feels as if an “open for business” sign has been hung above it. And*—*a third reason for the upturn—relative to New York it can look like a bargain.  Huw van Steenis of OIiver Wyman, a consultancy, points to a spate of acquisitions of City firms. In the past year Apollo and Brookfield, two private-markets giants based in America and Canada, have bought British insurers. Nuveen, another American asset manager, has agreed to buy Schroders. Some might worry about selling British heavyweights to foreigners—but the influx of capital is welcome.

Mr van Steenis points to a huge opportunity to finance data centres, infrastructure and defence spending that Britain badly needs. Its government-debt levels are already so high, he notes, that most of the funding will need to come from private capital which regulators could help mobilise. Making it easier for insurers to own such assets would help. Mr Wright of New Financial argues that wherever Britain’s regulation is more stringent than that of the City’s competitors, its government should explain why. “We can’t just say ‘we want to be the international destination of choice’ and then set higher requirements than elsewhere,” he says. That London’s financial district has thrived for so long is no reason to take it for granted.