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UK economy grows 0.4% in Q2 2026

8/14/2026

48 11 Full Breakdown

Summary

Story summary

The United Kingdom’s economy grew 0.4 per cent in Q2 2026, with June up 0.3 per cent, helped by warm weather and the FIFA World Cup.
Treasury, noting inflation at 2.6 per cent, expects a 4.3 per cent peak in 2027 and warns GDP could slip to 0.3 per cent if the Strait of Hormuz stays closed.
Chancellor John Healey pledged “breathing space” and cut VAT on electricity, while Prime Minister Andy Burnham removed VAT from domestic electricity.

History

Historical Context

October 1973 OAPEC’s oil embargo drove world prices up nearly 300%, forcing Chancellor Denis Healey to raise VAT to 15% and subsidise household electricity at £1.2 billion annually, while coal-miners’ strikes helped topple Edward Heath’s government in early 1974. In 2024 Chancellor John Healey again cut VAT on domestic electricity to cushion possible Hormuz-related supply disruptions.

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Story summary

The United Kingdom’s economy grew 0.4 per cent in Q2 2026, with June up 0.3 per cent, helped by warm weather and the FIFA World Cup.
Treasury, noting inflation at 2.6 per cent, expects a 4.3 per cent peak in 2027 and warns GDP could slip to 0.3 per cent if the Strait of Hormuz stays closed.
Chancellor John Healey pledged “breathing space” and cut VAT on electricity, while Prime Minister Andy Burnham removed VAT from domestic electricity.

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