The British economy expanded at a faster rate than initially expected in the second quarter, according to official figures, despite a strong deceleration compared to the beginning of 2025 amid pressure from tax increases and US President Donald Trump’s tariffs.
Figures from the Office for National Statistics (ONS) highlighted that progress in the gross domestic product came to 0.3% in the three months to the end of June, in comparison to a rate of 0.7% in the first quarter.
The recent numbers definitely beat forecasts of a 0.1% made by City economists and the Bank of England. But they also underscore the challenge for the chancellor as she focuses on boosting the economy and increasing revenues at her autumn budget.
Bank of England cuts interest rates
The UK economy is encountering significant challenges brought by a sluggish domestic outlook and the Trump tariffs. The chancellor is preparing for a difficult autumn budget amid speculation in regards to tax rises.
Earlier this month, the Bank of England made the decision to cut interest rates from 4.25% to 4%. It appears the establishment is currently focusing on a “gradual and careful” approach to ease the monetary pressure.
But there has been a split in opinions. The MPC of 9 members took part in making the decision. 5 members decided on trimming the interest rates, but 4 others did not feel the same. The currency rose 0.5% against the dollar after the announcement of the trimming of interest rates.
