Latest Market Alert | 18 July 2026
Executive Summary
The UK economy expanded by 0.1% in May, reversing April’s 0.1% contraction and broadly matching economists’ expectations. Growth was driven by a 0.3% increase in the services sector, while industrial production declined by 0.5% and construction output fell by 0.8%. The economy also recorded growth across the three months to May, indicating continued resilience despite a challenging global environment.
Why it matters
The latest figures demonstrate that the UK economy continues to grow, although the recovery remains uneven. Services continue to support overall economic performance while manufacturing and construction remain under pressure from higher financing costs, investment uncertainty and elevated input prices.
UK impact
The modest improvement should provide some reassurance for businesses and investors. However, stronger business investment and productivity growth will still be required to deliver a more balanced and sustainable economic recovery.
Global impact
The UK continues to outperform expectations despite heightened geopolitical uncertainty and elevated energy prices. Investors will continue monitoring economic resilience alongside inflation and interest-rate expectations.
Our View
The latest data are encouraging but should not be overstated. A durable recovery will depend upon stronger industrial activity and sustained private-sector investment rather than continued reliance on the services sector alone.
Risk Indicator: MODERATE
Disclaimer
The information contained within this Market Alert is provided for general market awareness and informational purposes only. It does not constitute financial, investment, legal or insurance advice, nor should it be relied upon when making commercial or investment decisions. Whilst every effort has been made to ensure the accuracy of the information at the time of publication using reputable sources, market conditions can change rapidly. Readers should seek appropriate professional advice before acting on any information contained herein.
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