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Services and Construction Surprise in the Second Quarter - NIESR
NIESR
2025.08.19
Coming in slightly higher than last month’s forecast, monthly GDP rose by 0.4 per cent in June, following a contraction of 0.1 per cent in May. Growth in June was driven by stronger-then-expected performance in services and construction.

The June growth figure pushed GDP growth up to 0.3 per cent in the second quarter of this year. Growth across the second quarter was mixed, with the April correction for brought-forward activity ahead of US tariffs providing a weak start which was followed by a recovery in services but continued contraction in production and construction sectors.
We expect GDP to grow by 0.5 per cent in the third quarter ? a slight upward revision from our early projection of 0.4 per cent last month. Despite this upward revision, elevated uncertainty among businesses and weak private consumption pose downside risks to this forecast. We also think that the Chancellor will have to tighten fiscal policy in the Autumn, and that speculation over such policy changes will weigh on economic activity in the coming months.
For a complete forecast of the UK economy, please see our Summer UK Economic Outlook, published last week.