Economic indicators: Key statistics for the UK economy

Summary

Provisional estimates from the Met Office indicate the UK experienced its second warmest July and sixth warmest August on record in 2026.

The summer weather was partly credited with increased turnover in several business sectors in July and boosting retail sales in August. UK consumer confidence levels also grew steadily for several months and reached their highest rate in over two years in September.

In his first major speech as Chancellor on 7 September, John Healey spoke of the economy “turning a corner”.

However, as summer turns to autumn, higher inflation, the prospect of future interest rate rises, and higher than expected borrowing figures provide a challenging economic backdrop for the Chancellor ahead of his first Budget next month.

Gross domestic product (GDP) and productivity

GDP is estimated to have grown by 0.4% in May to July 2026 compared to the previous three-month period (February to April 2026). Eurozone GDP grew by 0.6% in April to June 2026.

Services output was up by 1.7% in May to July 2026 compared to the previous year.

Manufacturing output increased by 1.7% over the same period.

Productivity across the whole UK economy decreased by 1.2% in Q2 2026 compared with the previous quarter, when measured by the ONS’s old method. Compared with the previous year, it was down by 0.2%.

Inflation and interest rates

CPI inflation was 3.1% in August 2026, up from 2.9% in July. Inflation in the Eurozone was 3.2% in August 2026, up from 2.9% in July.

The Bank of England’s Monetary Policy Committee (MPC) left interest rates unchanged at 3.75% on 17 September. Rates have been cut by 1.5 percentage points overall since August 2024.

Earnings and employment

Average wages excluding bonuses were 3.5% higher in the three months to July 2026 compared with the year before, and 0.8% higher after adjusting for inflation. CPI inflation for this period was 2.8%.

Data from the Labour Force Survey shows that 34.48 million people were in employment in May to July 2026, up 243,000 from a year before (but note that other data shows a fall in payrolled employees of 84,000 over the same period). The employment rate was 75.1%, down from 75.2% the previous year.

1.78 million people were unemployed in May to July 2026, up 83,000 from the year before. The unemployment rate was 4.9%. The UK harmonised unemployment rate for Q1 2026 was 5.0%, above the rate of Germany (3.9%) and the US (4.3%) but below that of France (8.2%).

Public finances

Government borrowing in the first five months of the 2026/27 financial year was £77 billion, which is £2 billion less than the amount borrowed during the same period in 2025/26.

At the end of August 2026, public sector net debt was equivalent to 95.1% of GDP, compared to 93.8% a year before.

Trade and exchange rates

The UK had a trade deficit of £9.0 billion in the three months to July 2026, compared to a deficit of £10.1 billion in the three months to April 2026.

The current account deficit was £11.3 billion in Q2 2026 (1.4% of GDP), down from £14.3 billion in Q1 2026 (1.8% of GDP).

The value of sterling increased by 0.2% between July and August 2026, having increased by 0.9% between June and July. Compared with a year ago, it is 0.8% higher.

Retail sales and consumer confidence

The volume of retail sales rose by 0.9% in the three months to August 2026 compared with the previous three months, and increased by 2.4% compared with the previous year.

GfK’s Consumer Confidence Index, which measures consumer attitudes, was at -13 in September 2026, up one point from August.

House prices

House prices increased by 1.4% over the year to July 2026.

Household debt

Household debt stood at 116.5% of disposable income in Q2 2026. This ratio has generally been decreasing since 2022.

Economic indicators are quick-read summaries of the latest data focusing on different aspects of the UK economy. The full suite of indicators can be found on the main Economic Indicators page.