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Published: 03 August 2026
EY UK Economic Outlook - Summer 2026 (PDF)
PDF Report: Discover how renewed geopolitical tensions, evolving energy markets and easing inflation are shaping the UK economy in 2026.
In brief:
- UK economic momentum held up relatively well in Q2 2026, helped by lower-than-expected inflation and falling global energy prices during the ceasefire in the Middle East.
- However, a return to an extended closure of the Strait of Hormuz could see UK inflation peak above 6% and economic growth go into reverse.
- Increased energy prices are a further headwind to the UK labour market along with worsening employment prospects among younger people.
- Services sectors continue to drive the majority of UK growth, supported by strong growth in exports.
- The UK construction sector will struggle to deliver the pipeline of infrastructure projects without increases in productivity.
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