The UK economy expanded by 0.4% between April and June, according to the latest figures released by the Office for National Statistics (ONS).
The services sector served as the primary growth engine, with banking, insurance, and hospitality businesses benefiting from warm weather and high-profile sporting fixtures.
Between April and June, sectors including computer programming, advertising and the pharmaceutical industry lifted growth. That was offset by falls in power generation and sewerage.
While the construction industry also expanded, production output remained broadly unchanged over the three-month period.
The ONS said that output remained "robust" despite domestic political unrest and fallout from the US-Iran war.
However, analysts have warned that the UK economy could struggle to maintain momentum through the remainder of the year amid domestic fiscal pressures and broader geopolitical instability.
ONS director of economic statistics Liz McKeown says: "Growth slowed in the second quarter of the year, following a strong start to 2026, but remained relatively robust.
"Services were once again the main driver of growth, while production was broadly unchanged and construction also grew."
Chancellor John Healey says the UK has seen the "fastest growth in the G7 this year" but now needs to "double down and drive growth in every postcode".
"I know people are worried about the impact of the conflict in the Middle East on their cost of living, which has been too high for too long and it has added pressure on British businesses," he says.
He calls Prime Minister Andy Burnham's government "active" and "hands-on", putting "British interests first" and "giving breathing space to those feeling the strain".
Burnham will consult small businesses on how the Government can best assist with their long-term planning.
He is seeking to establish a renewed working partnership between Government and small businesses.
